This dissertation examines the variations in bidding strategies and outcomes among different types of bidders in public takeovers, with a focus on private equity firms, public strategic buyers, and private strategic buyers. Drawing on a dataset of European public takeovers from 2005 to 2022, the study analyzes key deal characteristics, including toeholds, premium payments, irrevocable commitments, competition, hedge fund activism, and deal success rates.
The results demonstrate clear distinctions between bidder types. Strategic bidders exhibit a structural advantage over private equity bidders, as they are more likely to secure toeholds, offer higher premiums driven by synergies, and encounter less competition and hedge fund activism. Despite these advantages for strategic bidders, private equity firms achieve comparable success rates due to their extensive deal-making expertise, which allows them to negotiate effectively during the pre-offer phase.
While the differences between public and private strategic bidders are more nuanced, meaningful distinctions exist. Public strategic companies are considerably more likely to acquire toeholds before a deal announcement. In contrast, private strategic companies offset this disadvantage by offering higher premiums; however, in the absence of toeholds, the premium disparity diminishes. Notably, private strategic companies demonstrate slightly higher success rates in completing takeover attempts.
