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| Tekijä: | Fishman, M. J. |
| Otsikko: | Preemptive bidding and the role of the medium of exchange in acquisitions. |
| Lehti: | Journal of Finance
1989 : MAR, VOL. 44:1, p. 41-57 |
| Asiasana: | MERGERS FINANCIAL MODELS BIDDING |
| Kieli: | eng |
| Tiivistelmä: | The medium of exchange in acquisitions is studied in a model where bidders' offers bring forth potential competition on the one hand and targets and bidders are asymmetrically informed on the other hand. In equilibrium, both securities and cash offers are observed. Securities have the advantage of inducing target management to make an efficient accept or reject decision. Cash has the advantage of serving, in equilibrium, to "pre-empt" competition by signalling a high valuation for the target. Implications concerning the medium of exchange of an offer, the probability of acceptance, the probability of competing bids, expected profits, and the costs of bidders are derived. |
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