Preemptive bidding, target resistance, and takeover premiums

• 成果类型: Article
• 署名作者: Dimopoulos, Theodosios; Sacchetto, Stefano
• 署名单位: Swiss Finance Institute (SFI); University of Lausanne; Carnegie Mellon University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2014.07.013
• 发表日期: 2014
• 页码: 444-470
• 关键词: Mergers and acquisitions; auctions; Target resistance; Preemptive bidding; structural estimation

摘要

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 moments for a sample of US takeovers. Our estimates imply that target resistance explains the entire magnitude of the premium in 74% of successful single-bidder contests. Simulation experiments show that initial bidders have, on average, a higher valuation for the target than rival bidders, so that a relatively low initial bid is sufficient to deter a rival from entry. (C) 2014 Elsevier B.V. All rights reserved.