A QUICK LOOK AT TOPPING BIDS | GO-SHOPS AND TOPPING BIDS
Here, we look at deals that were topped by a third party.
Go-shops can sometimes result in higher offers. For example, when go-shops resulted in a bidding contest, the target was able to solicit a bid that exceeded the original offer by 10.6 percent. This is a bit higher than 6.2 percent, the amount by which bids without a go-shop were topped.
The table also shows that when the dust settles, the final premium realized by targets that received a topping bid was 44.9 percent for deals with a go-shop and 43.7 percent for deals without the provision.
Here, we look at deals that were not topped by a third party.
On average, the premium received by targets was 32.7 percent. Deals with a go-shop received a premium of 29.5 percent, while deals without one had a premium of 33.0 percent.
On the whole, as the tables suggest, and as has been noted before, go-shops can be useful – but they are not free.
View this page on a desktop, laptop, or tablet to view the associated tables.
1. Transactions are selected based on the following criteria:
2. If two transactions share the same target company and the time span between the announcement dates of the two transactions is less than one year,
the two transactions are combined as one transaction with two different bids.
3. 27 topping transactions are excluded due to missing data. 186 non-topping transactions are excluded due to missing data.
4. Premium Calculation:
5. Third-party topping deals have more than one bidder. Self-topping deals have only one bidder.
6. Thomson ONE, Bloomberg, SEC EDGAR, Capital IQ.
This feature appeared in the July 2013 Corporate Transaction Litigation Alert.