Abstract

https://ssrn.com/abstract=1559481
 
 

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Strategic and Financial Bidders in Takeover Auctions


Alexander S. Gorbenko


University of Southern California - Marshall School of Business

Andrey Malenko


MIT Sloan School of Management

April 1, 2014

Journal of Finance, Forthcoming

Abstract:     
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, (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.

Number of Pages in PDF File: 74

Keywords: Mergers and Acquisitions, Strategic Bidders, Financial Bidders, Takeover Auctions

JEL Classification: D44, G32, G34


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Date posted: March 3, 2010 ; Last revised: April 2, 2014

Suggested Citation

Gorbenko, Alexander S. and Malenko, Andrey, Strategic and Financial Bidders in Takeover Auctions (April 1, 2014). Journal of Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1559481 or http://dx.doi.org/10.2139/ssrn.1559481

Contact Information

Alexander S. Gorbenko
University of Southern California - Marshall School of Business ( email )
701 Exposition Blvd
Los Angeles, CA 90089
United States

Andrey Malenko (Contact Author)
MIT Sloan School of Management ( email )
100 Main Street
E62-619
Cambridge, MA 02142
United States
617-225-9301 (Phone)
HOME PAGE: http://www.mit.edu/~amalenko

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