Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/81227
Authors: 
Lindqvist, Tobias
Year of Publication: 
2004
Series/Report no.: 
IUI Working Paper 630
Abstract: 
This paper evaluates partial acquisition strategies. The model allows for buying a share of a firm before the actual acquisition takes place. Holding a share in a competing firm before the acquisition of another firm, outsider-toehold, eliminates the insiders' dilemma, i.e. profitable mergers do not occur. This strategy may thus be more profitable for a buyer than acquiring entire firms at once. Furthermore, the insiders' dilemma arises from the assumption of a positive externality on the outsider firm and acquiring an outsider-toehold is thus a signal of an anti-competitive merger.
Subjects: 
Acquisition
Antitrust
Insiders' Dilemma
Mergers
Toeholds
JEL: 
G34
L12
L13
L41
Document Type: 
Working Paper

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