An Optimal Timing of Merger and Acquisition under Cooperation Opportunism and Premium in Real Options and Game-theoretic Framework: Chinalco Mergering Rio Tinto Plc for Example

摘要

This paper studies on optimal timing of merger and acquisition for cooperative bidders under cooperation opportunism and premium. We incorporate Douglas production function as the way to get a common optimal timing of the two cooperative bidders which is in real options and game-theoretic framework. And then with different estimation of successful probability and premium level, we compare the real counted value of xb/xm with the theoretical threshold which are all based on the case of two cooperative bidders Chinalco and Alcoa mergering Rio Tinto Plc. And finally we draw the conclusion that the real counted value of cooperative bidders to merger the target was far away from their common optimal timing.