Many acquisitions are conducted by clubs, i.e., coalitions of acquirers that submit a single bid. We present a novel analysis of club bidding where the club creates value by aggregating, at least partially, bidders' values. We show that club formation can lead to higher acquisition prices when...

This paper analyzes a model of preemptive jump bidding in private value takeover auctions with entry costs. It shows that when the second bidder owns a fraction of the target firm preemptive jump bidding leads to a higher social surplus, improves the expected profit of both bidders and reduces...

This paper analyzes the preemptive jump bidding equilibrium in takeover auctions when the acquisition of the target firm by one of the bidders may affect the profit of the other bidder. It shows that such externality has no effect on the preemption rate but affects the size of the jump bid...

When bidders in a corporate takeover have related resources and post-acquisition strategies, their valuations of a target are likely to be interdependent. This paper analyzes sequential-entry takeover contests in which similar bidders have correlated private valuations. The level of similarity...

I survey a literature on auctions with contingent payments, that is auctions in which payments are allowed to depend on an ex-post verifiable variable, such as revenues in oil lease auctions. Based on DeMarzo et al. (2005), I describe a partial ranking of auction revenues for auctions that...

We evaluate empirically two sources of large takeover premiums: preemptive bidding and target resistance. We develop an auction model that features costly sequential entry of bidders in takeover contests and encompasses both explanations. We estimate the model parameters by simulated method of...

This paper presents a model of preemptive bidding in takeover auctions with toeholds. It shows that when the first bidder owns a fraction of the target firm he is more likely to deter competition and a smaller jump bid is required to do so. It also shows that in the presence of the toehold, the...

Takeover attempts from raiders with prior stakes in the target company (toeholds) are frequent in the market for corporate control. In this context, we propose a simple and realistic selling mechanism with an agenda of exclusive negotiations that discriminates against larger-toehold raiders....

We address whether the joint bidding by private equity consortiums facilitates collusion in the takeover market. We employ a sample of 870 takeovers of publicly traded targets in the 2003 to 2007 period, the time period which is the focus of investigation by the Justice Department and the source...

This paper extends Fishman's (1988) model of preemptive bidding in takeover auctions to auctions with affiliated values. It shows that preemptive bidding transfers wealth from the seller to the first bidder without affecting the profit of the second bidder and social welfare. It also shows that...