Anmerkungen:
In: The Accounting Review
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments May 4, 2022 erstellt
Beschreibung:
We examine takeover auctions when an informed bidder has better informationabout the target value than a rival and target shareholders. The informed bidder'sinformation is either hard or soft, and only hard information can be credibly disclosed.We show that withholding information creates a winner's curse, thereby serving as apreemption device that deters the rival's participation. In turn, an endogenous disclosurecost arises that induces the informed bidder to optimally withhold favorableinformation to minimize the acquisition price|breaking down the standard unravelingresult, even if his information is always hard. Perhaps surprisingly, strongercompetition from the uninformed bidder can reduce the target shareholders' payoffand increase the payoff of the informed bidder while unambiguously improving socialwelfare. Moreover, "hardened" information can reduce the gains to trade, decreasingwelfare but increasing shareholders' payoff . Our results provide a cautionary note topromoting more competition and more disclosure