Leveraged Management Buyout

Leveraged Management Buyout

A tactic in which the senior management of a publicly-traded company borrows heavily to buy all of the company's shares outstanding. A leveraged management buyout gives the management complete control of the company and allows it to operate without recourse to shareholders. Most management buyouts are leveraged. It is a form of going private.
References in periodicals archive ?
The fate of Ethel Austin is an alarm call for everybody, particularly those businesses, which - like Ethels - are owned through a highly leveraged management buyout.
These include the leveraged management buyout of Glass Systems Limited, the sale of Unit Superheater Engineering Limited and last month's sale of 27 Innkeeper Wales pubs and hotels to the Cardiff brewer SA Brain.
The approach that goes about as far as possible on the risk-and-reward spectrum is to take the whole company private in a leveraged management buyout (MBO).
The leveraged management buyout - a strategy in which financial specialists and corporate executives jointly participated in taking undervalued (really undermanaged) assets private with high levels of debt financing - is a happier story, demonstrating what good could happen when managerial and shareholder interests were brought more closely back into alignment for the purpose of improving long-term equity value.
The figures represented the fourth year of independent trading for Accantia, which was formed from a leveraged management buyout from pharmaceutical giant Smith & Nephew.
Leveraged management buyouts can pose particular challenges including reporting requirements which may not have been quite so onerous before - but this should also be seen as a good corporate discipline which will benefit the business if managed correctly.
The causes and consequences of leveraged management buyouts. Academy of Management Review, 17, 62-85.
NBER researchers began to study corporate restructuring in earnest in the late 1980s in the midst of a huge wave of mergers, acquisitions, and leveraged management buyouts. The total value of U.S.
Amihud, "Leveraged Management Buyouts and Shareholder Wealth," in Leveraged Management Buyouts, Y.