TransWikia.com

Whats the name of the famous hostile takeover where the winner payed less than the loser

Economics Asked by Max Görner on March 28, 2021

In my studies I learned about a bid war ending in a hostile takeover where the winner ended up paying less than the loser offered. It is a very nice demonstration of elements of game theory so I would like to reread that again and to recommend it to a friend.

Unfortunately, I cannot find it in the internet regardless of what search terms I try. I will state the details I remember. I would be very glad if the answer could tell which companies were included so I can research the interesting details.

Here we go:

  1. Two companies, A and B, competed about to acquire a third one.
  2. The bid war happened at least 10 years ago, maybe more.
  3. The bid war ended in a hostile takeover.
  4. Company A offered a fixed amount. I am not sure, but that offer might have been valid only if enough shareholders accepted it.
  5. Company B offered a higher amount regardless of enough shareholders accepting it. However, if a certain number of shares were reached, the offered price was reduced linearly.
  6. B’s offer was dominating A’s offer. B won the hostile takeover.
  7. In the end, shareholders received less for their shares than what A offered initially. (This is the crazy thing about this bid war).

I was unable to translate that list in sufficient search terms. Does it ring a bell for someone?

One Answer

https://en.wikipedia.org/wiki/Pyrrhic_victory

Probably you are looking for this term. Today It describes any situation where a win is achieved at a such a large cost that it is likely that loosing was more profitable.

https://en.wikipedia.org/wiki/Dollar_bill_auction

This is somewhat similar situation in auctions

Answered by Surprised Seagull on March 28, 2021

Add your own answers!

Ask a Question

Get help from others!

© 2024 TransWikia.com. All rights reserved. Sites we Love: PCI Database, UKBizDB, Menu Kuliner, Sharing RPP