Negotiation under the threat of an auction : friendly deals , ex-ante competition and bidder returns by

@inproceedings{Aktas2007NegotiationUT,
  title={Negotiation under the threat of an auction : friendly deals , ex-ante competition and bidder returns by},
  author={Nihat Aktas and Eric de Bodt and Richard Roll},
  year={2007}
}
Observable (ex-post) competition in the merger and acquisition (M&A) market seems to be very low. In this paper, we focus on the role of ex-ante competition and show that, when this is taken into account, the M&A market is more competitive than it seems. We first provide a theoretical analysis where we model takeovers as a two-stage process. The initial stage corresponds to a oneto-one negotiation with the target. If the negotiation fails, there is a second stage in which either a takeover… CONTINUE READING
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