As measured by the number of bidders that publicly attempt to acquire a target, the takeover arena in the 1990s appears noncompetitive. However, we provide novel data on the pre-public, private takeover process that indicates that public takeover activity is only the tip of the iceberg of actual takeover competition during the 1990s. We show a highly competitive market where half of the targets are auctioned among multiple bidders, while the remainder negotiate with a single bidder. In event study analysis, we find that the wealth effects for target shareholders are comparable in auctions and negotiations. Copyright 2007 by The American Finance Association.
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Vasiliki Skreta & Nicolas Figueroa, 2008.
"What to Put on the Table,"
Working Papers
08-11, New York University, Leonard N. Stern School of Business, Department of Economics.
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