The Sale of Small Firms: A Multidimensional Analysis

The Sale of Small Firms: A Multidimensional Analysis

This paper endogeneizes the security voting structure in an auction mechanism used to sell a small firm. The design of security voting structure allows the seller to choose between two objectives which are not mutually consistent. If the seller wants to maximize his revenue, he should retain some sh...

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Veröffentlicht in:Economic theory 2003-11, Vol.22 (4), p.927-933
Hauptverfasser: At, Christian, Morand, Pierre-Henri
Format: Artikel
Sprache:eng
Schlagworte:
Allocative efficiency
Auctions
Business structures
Dividends
Economic theory
Economics
Exposita Notes
Financial securities
Market theory
Revenue
Sales
Small and medium sized enterprises
Stocks
Total revenue
Voting rights
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Zusammenfassung:This paper endogeneizes the security voting structure in an auction mechanism used to sell a small firm. The design of security voting structure allows the seller to choose between two objectives which are not mutually consistent. If the seller wants to maximize his revenue, he should retain some shares to benefit from the future dividends generated by the acquirer. At the opposite, if he wants to sell his firm to the most efficient candidate, he should sell all the shares.
ISSN:0938-2259
1432-0479
DOI:10.1007/s00199-002-0342-3