We consider a takeover in which risk neutral bidders incur private costs to participate to the auction. Supposing that valuations for target firm are common knowledge, we study the optimal strategy of bidders and analyze the takeover result when they get or not toeholds in the target firm. We...

We consider a takeover setting in which bidders are risk averse and study aversion's consequences on their strategy. We found that when bidders are risk averse, under some conditions, their overbidding depends on the size of toeholds they hold. We show that there is a threshold under that a...