Just trying to understand, when considering an LBO deal :
1 - Why would a sponsor invest in quasi-equity (convertible bonds, preferred shares, etc) on top of ordinary shares when doing an LBO ? What would he gain from investing the same amount in ordianry equity ?
2 - How are amount and form of this investment chosen ? I guess maximizing profit is the ultimate goal but are there other considerations (ManPack is the only thing that comes to my mind right now)
Also v. interested if you have some reading materials about this
Many thanks !