OPTIMAL TIMING AND EQUILIBRIUM PRICE FOR SOE PROPERTY RIGHTS TRANSFER UNDER IMPERFECT INFORMATION

摘要

This paper develops a model of pricing for state-owned enterprise (SOE) property rights transfer in a dynamic economic environment. We incorporate competition and imperfect information in the model, and determine the equilibrium selling price and optimal timing of takeovers by solving a real options exercise game between bidders and a target. The main conclusions are consistent with real-world experience. The model generates new results as the equilibrium transfer price and the optimal timing relate to industry, the target, the transfer costs, the expected synergies, the re-divestiture option, and the transfer markets' microstructure. The more the bidders' expected synergy effects, the faster the acquisitions. The expected synergy effects differ among various bidders, and auction is the only way to reflect the synergy effects correctly. An active market for corporate control will be helpful for the transfer of SOE property rights. The model's applications include pricing M&A, venture capital, and IPOs.