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Article Dans Une Revue Journal of financial economics Année : 2010

Negotiations under the threat of an auction

Résumé

Many takeovers occur after one-on-one negotiations, which suggests a troubling lack of competition. We seek to determine whether acquirers in such friendly deals are truly insulated from competitive pressures. We study two countervailing influences: potential but unobserved latent competition, i.e., the likelihood that rival bidders could appear, and anticipated auction costs when negotiations fail. Using various proxies, we find that latent competition increases the bid premium offered in negotiated deals and that auction costs reduce the premium.

Dates et versions

hal-02312521 , version 1 (05-03-2020)

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Nihat Aktas, Eric de Bodt, Richard Roll. Negotiations under the threat of an auction. Journal of financial economics, 2010, 98 (2), 241-255 p. ⟨10.1016/j.jfineco.2010.06.002⟩. ⟨hal-02312521⟩

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