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Analyse de l'impact des coûts de participation sur la stratégie des enchérisseurs dans les Prises de contrôle
[Participation costs and optimal strategy in takeovers]

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  • Burkart, Mike
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    Abstract

    We consider a takeover in which risk neutral bidders must incur participation costs and study their optimal strategy. We found that bidders decision of participation is endogenous. There is a threshold of private participation cost above that a potential bidder will stay out of takeover process. Moreover, when he decides to participate in takeover, his optimal strategy is the submission of his own valuation for the target firm. However, a bidder without initial shareholdings and with low valuation can be completely deterred by the bidder with initial shareholdings. Indeed, a who gets toeholds in the target firm, overbids when he participates in takeover. This can led to an inefficient allocation.

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    File URL: http://mpra.ub.uni-muenchen.de/13825/
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    Bibliographic Info

    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 13825.

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    Date of creation: 06 Mar 2009
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    Handle: RePEc:pra:mprapa:13825

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    Keywords: Partipation costs - Initial shareholdings - Private valuation - Overbidding - Takeovers;

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    1. Bradley, Michael, 1980. "Interfirm Tender Offers and the Market for Corporate Control," The Journal of Business, University of Chicago Press, vol. 53(4), pages 345-76, October.
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