Target firms are often faced with bidders that are not equally well informed. This reduces the competition between the bidders, since a less well informed bidder fears the winner's curse more. We analyze how a target should optimally be sold in the presence of asymmetric bidders. We show that a...

Go-shop provisions have changed the way in which private equity firms execute public-company buyouts. While there has been considerable practitioner commentary on go-shops in the three years since they first appeared, this paper presents the first systematic empirical evidence on this new...

We model takeovers as a bargaining process and explain termination fees for, both, the target and the acquirer, subject to parties' bargaining power and outside options. In equilibrium, termination fees are offered by firms with outside options in exchange for a greater share of merger...

Management buyouts (MBOs) are an economically and legally significant class of transaction: not only do they account for more than $10 billion in deal volume per year, on average, they also play an important role in defining the relationship between inside and outside shareholders in every...

In light of recent developments in auction theory, this Article re-examines Delaware corporate law governing directors' actions when structuring the sale of a corporation. A foundational doctrine of Delaware law is that when the board of directors resolves to sell a corporation, it must obtain...

Swedish bankruptcy filing automatically terminates CEO employment and triggers an auction of the firm. Critics of this system warn of excessive shareholder risk-shifting incentives prior to filing. We argue that private benefits of control induce managerial conservatism that may override...

This paper develops an auction design framework to analyze various methods for assessing “fair value” in post-merger appraisal proceedings. Our inquiry spotlights an approach recently embraced by some courts benchmarking fair value against the merger price itself. We show that merger price...

We provide new evidence on termination provisions and the takeover bidding process. Our central contribution is a novel database from SEC documents that accurately measures the incidence of termination provisions and the depth of competition in takeover deals. We show that biased data in prior...

Lacking examples of IPO mechanisms that are open to the public and priced competitively, previous studies could not determine what size discount, if any, is efficient. We test and reject the hypothesis that underpricing is efficient or consistent with competition by comparing two consecutive...