Tactic used by the target of a hostile takeover in which a company makes itself less desirable by borrowing a large sum of money and distributing it to its shareholders, by either initiating a buyback program or paying larger than normal dividends. In this way, the company might be able to scare away undesirable acquirers who do not want to take on so much debt, while at the same time retaining shareholder interest in the company (in spite of it being so heavily leveraged).
Related information about leveraged recapitalization:
- Leveraged recapitalization - Wikipedia, the free encyclopedia
In corporate finance, a leveraged recapitalization is a change of the capital structure of a company, a substitution of equity for debt —e.g. by issuing bonds to ...
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Need to buy out a shareholder but don't want to put up your own money? Need to take some chips off the table but don't want to sell out? Reduce your risk and ...
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Often used in risk arbitrage. A public company takes on significant additional debt with the purpose of either paying an extraordinary dividend or repurchasing ...
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Definition of leveraged recapitalization: Tactic used by the target of a hostile takeover in which a company makes itself less desirable by borrowing a large sum ...