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 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...

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...

This paper examines how shareholdings affect auctions' revenue and efficiency with independent private values. Two types of shareholdings are analyzed: vertical (resp: horizontal) toeholds cover situations in which bidders own a fraction of the seller's profit (resp: a share of their...

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...

We compare the most common methods for selling a company or other asset when participation is costly: a simple simultaneous auction, and a sequential process in which potential buyers decide in turn whether to enter the bidding. The sequential process is always more efficient. But preemptive...

We consider a setting in which two potential buyers, one with a prior toehold and one without, compete in a takeover modeled as an ascending auction with participating costs. The toeholder is more aggressive during the takeover process because she is also a seller of her own shares. The...

Nous étudions l'impact des participations au capital sur les enchères à valeurs privées indépendantes. Le revenu de l'enchère décroît lorsque les acheteurs ont des participations croisées et croît lorsqu'ils détiennent une partie du capital du vendeur. Dans tous les cas de...

We consider takeover bidding in a Cournot oligopoly when firms have private information concerning the synergy effect of merging with a takeover target. Two auction rules are considered: standard first-price and profit-share auctions, supplemented by entry fees. Since non-merged firms benefit...

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....