In brief:

  • Pre-bid strategies, such as option agreements and voting agreements, are being used more often by bidders before announcing takeovers or schemes of arrangement
  • The evidence suggests that pre-bid strategies increase a bid's chance of success
  • Private equity bidders have had a lower success rate than other bidders generally, but a higher jump in the success rate when a pre-bid strategy is used
  • There are a number of different pre-bid strategies that bidders can consider.

Synposis

For a bidder launching a takeover or scheme of arrangement, a pre-bid strategy can give them a better chance of achieving lift off. This paper summarises our analysis of takeover and scheme data for the past decade, and it is hard to ignore the correlation between pre-bid strategies and success rates. We then identify different strategies that bidders should consider, from the most common to the less well known, and we also present a hybrid strategy of our own.

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