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| Tekijä: | Kaplan, S. N. |
| Otsikko: | Campeau's acquisition of federated: value destroyed or value added |
| Lehti: | Journal of Financial Economics
1989 : DEC, VOL. 25:2, p. 191-212 |
| Asiasana: | MERGERS DEBT FINANCING |
| Kieli: | eng |
| Tiivistelmä: | The acquisition of Federated Department Stores by Campeau Corporation is analyzed. It is found that after the purchase the value of Federated assets increased by more than USD 1.8 billion. Federated and Campeau defaulted on the debt used to finance the acquisition because Campeau paid a premium of USD 3.4 billion for Federated, an overpayment of USD 1.6 billion, financed 97% of the purchase with debt, and did not have enough other assets to make up the shortfall. The Federated purchase illustrates that a highly leveraged transaction can increase value, but still not be able to make its debt payments. |
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