Bust-Up Takeover

A corporate buyout in which the acquirer sells off a piece of the company in order to pay down some of the debt used to finance the initial buyout. The acquirer buys the company by taking on debt and then repays it with the target’s assets once it has control. This is a strategic method used in cases where the target company has undervalued assets that the acquirer seeks to exploit.

This style of buyout, as with any leveraged buyout, involves heavy analysis on behalf of the acquirer to adequately value the target company’s assets and to make sure that the return on those assets pays for the added cost of debt.

If the target company has significantly undervalued assets and the acquirer has little cash (and so needs debt to fund the purchase), this strategy could be implemented to successfully unlock value.

Investment dictionary. . 2012.

Look at other dictionaries:

  • bust-up takeover — A leveraged buyout in which the buyer sells off the assets of the target company to repay the debt that financed the takeover. Bloomberg Financial Dictionary * * * bust up takeover UK US noun [C] (also bust up acquisition) ► FINANCE the ac …   Financial and business terms

  • bust-up takeover — noun a leveraged buyout in which the target company s assets are sold to repay the loan that financed the takeover • Hypernyms: ↑leveraged buyout …   Useful english dictionary

  • junk bond bust up takeover —   scalata con disgregazione per pagare i junk bond   Tipo di takeover più dirompente e spregiudicatamente speculativo. Si verifica quando la società oggetto della scalata viene smembrata per coprire e finanziare il debito contratto con l… …   Glossario di economia e finanza

  • bust-up proxy proposal — Fin an overture to a company’s stockholders for a leveraged buyout in which the acquirer sells some of the company’s assets in order to repay the debt used to finance the takeover …   The ultimate business dictionary

  • acquisition — When a firm buys another firm. Bloomberg Financial Dictionary Receipt, by a person registered or liable to be registered for VAT, of goods that have been supplied by a registered person in another European Union ( EU) Member State and removed… …   Financial and business terms

  • leveraged buyout — noun a buyout using borrowed money; the target company s assets are usually security for the loan a leveraged buyout by upper management can be used to combat hostile takeover bids • Hypernyms: ↑buyout • Hyponyms: ↑bust up takeover * * * noun, pl …   Useful english dictionary

  • Разрушающее поглощение — выкуп с помощью кредитного рычага, при котором имущество или бизнес компании жертвы распродается для погашения долга, ставшего причиной поглощения. По английски: Bust up takeover См. также: Враждебные поглощения Финансовый словарь Финам …   Финансовый словарь

  • History of private equity and venture capital — The history of private equity and venture capital and the development of these asset classes has occurred through a series of boom and bust cycles since the middle of the 20th century. Within the broader private equity industry, two distinct sub… …   Wikipedia

  • Private equity in the 1980s — relates to one of the major periods in the history of private equity and venture capital. Within the broader private equity industry, two distinct sub industries, leveraged buyouts and venture capital experienced growth along parallel although… …   Wikipedia

  • Subprime mortgage crisis — Part of a series on: Late 2000s financial crisis Major dimensions …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.