This paper investigates the optimal bidding strategy for the initial bidder in takeover contests. In the theoretical model, the initial bidder has the choice between making a low or a high preemtive initial bid.(...)

The deterring role of the medium of payment in a takeover contest is analyzed from the point of view of the bidder. Cash, debt and equity are considered as alternative mediums of payment, and the bidder equilibrium strategies are specified following the Perfect Bayesian Equilibrium requirements...