Strategic and Financial Bidders in Takeover Auctions
Using data on auctions of companies, we estimate valuations (maximum willingness to pay) of strategic and financial bidders from their bids. We find that a typical target is valued higher by strategic bidders. However, 22.4% of targets in our sample are valued higher by financial bidders. These are...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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American Finance Association/Wiley
2015
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| Online Access: | http://hdl.handle.net/1721.1/98906 https://orcid.org/0000-0002-6429-850X |
| _version_ | 1826202164252377088 |
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| author | Gorbenko, Alexander S. Malenko, Andrey |
| author2 | Sloan School of Management |
| author_facet | Sloan School of Management Gorbenko, Alexander S. Malenko, Andrey |
| author_sort | Gorbenko, Alexander S. |
| collection | MIT |
| description | Using data on auctions of companies, we estimate valuations (maximum willingness to pay) of strategic and financial bidders from their bids. We find that a typical target is valued higher by strategic bidders. However, 22.4% of targets in our sample are valued higher by financial bidders. These are mature, poorly performing companies. We also find that (i) valuations of different strategic bidders are more dispersed and (ii) valuations of financial bidders are correlated with aggregate economic conditions. Our results suggest that different targets appeal to different types of bidders, rather than that strategic bidders always value targets more because of synergies. |
| first_indexed | 2024-09-23T12:03:13Z |
| format | Article |
| id | mit-1721.1/98906 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T12:03:13Z |
| publishDate | 2015 |
| publisher | American Finance Association/Wiley |
| record_format | dspace |
| spelling | mit-1721.1/989062022-09-27T23:44:39Z Strategic and Financial Bidders in Takeover Auctions Gorbenko, Alexander S. Malenko, Andrey Sloan School of Management Malenko, Andrey Using data on auctions of companies, we estimate valuations (maximum willingness to pay) of strategic and financial bidders from their bids. We find that a typical target is valued higher by strategic bidders. However, 22.4% of targets in our sample are valued higher by financial bidders. These are mature, poorly performing companies. We also find that (i) valuations of different strategic bidders are more dispersed and (ii) valuations of financial bidders are correlated with aggregate economic conditions. Our results suggest that different targets appeal to different types of bidders, rather than that strategic bidders always value targets more because of synergies. 2015-09-25T17:23:18Z 2015-09-25T17:23:18Z 2014-11 Article http://purl.org/eprint/type/JournalArticle 00221082 1540-6261 http://hdl.handle.net/1721.1/98906 Gorbenko, Alexander S., and Andrey Malenko. “Strategic and Financial Bidders in Takeover Auctions.” The Journal of Finance 69, no. 6 (November 10, 2014): 2513–2555. https://orcid.org/0000-0002-6429-850X en_US http://dx.doi.org/10.1111/jofi.12194 The Journal of Finance Creative Commons Attribution-Noncommercial-Share Alike http://creativecommons.org/licenses/by-nc-sa/4.0/ application/pdf American Finance Association/Wiley SSRN |
| spellingShingle | Gorbenko, Alexander S. Malenko, Andrey Strategic and Financial Bidders in Takeover Auctions |
| title | Strategic and Financial Bidders in Takeover Auctions |
| title_full | Strategic and Financial Bidders in Takeover Auctions |
| title_fullStr | Strategic and Financial Bidders in Takeover Auctions |
| title_full_unstemmed | Strategic and Financial Bidders in Takeover Auctions |
| title_short | Strategic and Financial Bidders in Takeover Auctions |
| title_sort | strategic and financial bidders in takeover auctions |
| url | http://hdl.handle.net/1721.1/98906 https://orcid.org/0000-0002-6429-850X |
| work_keys_str_mv | AT gorbenkoalexanders strategicandfinancialbiddersintakeoverauctions AT malenkoandrey strategicandfinancialbiddersintakeoverauctions |