The economics of club bidding and value creation

• 成果类型: Article
• 署名作者: Marquez, Robert; Singh, Rajdeep
• 署名单位: University of California System; University of California Davis; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2012.12.001
• 发表日期: 2013
• 页码: 493-505
• 关键词: Club bidding; Joint bidding; Mergers and Acquisitions; Takeover auctions; PRIVATE EQUITY

摘要

Many acquisitions are conducted by clubs, i.e., coalitions of acquirers that submit a single bid. We present a novel analysis of club bidding where the club creates value by aggregating, at least partially, bidders' values. We show that club formation can lead to higher acquisition prices when the number of bidders is exogenously fixed and large. However, when entry costs require bidders to optimize their participation decisions, club formation acts as an endogenous limit on competition and reduces the target's premium. In contrast, social efficiency with club bidding is always higher. Our findings can reconcile the contradictory evidence on club bidding. (C) 2012 Elsevier B.V. All rights reserved.