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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]

Author

Listed:
  • Burkart, Mike

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.

Suggested Citation

  • Burkart, Mike, 2009. "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]
    ," MPRA Paper 13825, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13825
    as

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    File URL: https://mpra.ub.uni-muenchen.de/13825/1/MPRA_paper_13825.pdf
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    References listed on IDEAS

    as
    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 345-376, October.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

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

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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