A Theoretical And Empirical Research On Financing Of Management Buy-out

Financing is a crucial factor to the success of the management buyout(MBO).The MBO needs lots of funds, which managers can not afford. And, they also won'tuse their own funds completely even they have enough funds, with consideration forthe risk. They will choose the way of debt financing or share financing to carry outthe MBO. The key to the success of MBO lies in financing. The financing mode andthe structure of financing are not only the problem that the MBO must solve, but alsothe key to the success of the MBO.The dissertation firstly analyzes and introduces the theory of MBO financinginstitution arrangement. Then it elaborates the MBO concept, the motivation and thecharacteristics of the MBO in foreign countries. The development and the motivationof the MBO in our country are also discussed. A comparison between the MBO inChina and that in western countries is made. Business financing structure theory isstudied in perspective of early capital structure theory, MM theory, tradeofftheory, incentive theory, information asymetry theory and control rights theory and thetheory of MBO financing is thus established.The private capital develops quickly and the borrowing scale becomes biggerand biger in our country. The dissertation explains and analyzes the motivation of theMBO. It discusses the MBO financing mechanism in the point of view of informationasymmetry and manager's endogenetic preference. On the basis of analysis andintroduction of the behavior finance theories, the dissertation explores MBOfinancing modes and channels.The dissertation analyzes the financing strategy and risk management and pointsout that systematic and non-sysetematic risks exsist in MBO financing. It respectivelydiscusses the factors which are related to the financing directly and indirectly. Itidentifies the target of risk management. Based on the analysis of early warning andearly control system of risk management, the dissertation explores the knowledgemanagement in MBO financing. The dissertation analyzes the strategy of financing and the financing strategy ofMBO under certain conditions and points out that a good MBO financing strategy,especially a good financing structure can decrease the agent cost, avoid the manager'sopportunism, improve the company's performance, maximize the company's valueand increase the company' capacity in control power market.Certain plcs in HU SHEN Exchange are selected as samples to study their MBOfinancing modes, MBO financing structure and their performance after MBO.Furthermore, Yutong Bus Corporation and Wuchang Fish Company is sustantialystudied.On the basis of previous analysis, the author proposes certain solutions todevelop and improve the MBO financing in our country from three aspects, such asthe formulation of related laws and regulations, market conditions and financingchannels.