The Dynamics of Takeovers through Exchange Offers in the Presence of Competition

Ryo Miyata, Teruyoshi Suzuki and Kyoko Yagi

No 362, Discussion paper series. A from Graduate School of Economics and Business Administration, Hokkaido University

Abstract: This study examines the characteristics of takeovers in the presence of competition using a threestage model. We first investigate the property of the equilibrium of mergers and takeovers in a frictionless market, and then analyze the effect that the existence of the competitors had on this process. We apply a general surplus function, rather than a specific one, eliminating the modifying effects of this factor from our study. Our model predicts that the existence of heavy competition in the takeover increases the number of unsuccessful or incomplete deals. Furthermore, we find that the shareholders of the target in a competitive market can choose the timing of accepting an offer, without the need to observe the surplus benefit of the deal. Our model shows that the presence of competition does not always provide the target shareholders with an advantage.

Keywords: Merger and acquisitions; real options; competitions (search for similar items in EconPapers)
Pages: 29 pages
Date: 2022-03
New Economics Papers: this item is included in nep-com and nep-ind
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/2115/84704 (text/html)
https://eprints.lib.hokudai.ac.jp/dspace/bitstream/2115/84704/1/DPA362.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hok:dpaper:362

Access Statistics for this paper

More papers in Discussion paper series. A from Graduate School of Economics and Business Administration, Hokkaido University Contact information at EDIRC.
Bibliographic data for series maintained by Hokkaido University Library (repo@lib.hokudai.ac.jp).