We study the relations between takeover negotiations duration, competition and learning, focusing on the private phase of bidder-initiated transactions. While the negotiation goes on, both parties learn about true deal synergies. At any moment, rival bidders can show up and compete for the target. Using a discrete-time finite-horizon dynamic programming approach, we derive the equilibrium relations between the negotiation duration, the pressure of potential competition and the learning process. Next, we perform a calibration exercise on a large sample of merger negotiations with hand-collected data from the Securities and Exchange Commission filings. Our results provide evidence of a very competitive M&A (Mergers and acquisitions) market.
Takeover duration and negotiation process / Calcagno, Riccardo. - In: EUROPEAN FINANCIAL MANAGEMENT. - ISSN 1468-036X. - ELETTRONICO. - 27:4(2021), pp. 589-619. [10.1111/eufm.12331]
|Titolo:||Takeover duration and negotiation process|
|Data di pubblicazione:||2021|
|Digital Object Identifier (DOI):||http://dx.doi.org/10.1111/eufm.12331|
|Appare nelle tipologie:||1.1 Articolo in rivista|