The Sale of Small Firms: A Multidimensional Analysis
Posted: 21 Jun 2004
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.
Keywords: Security voting structure, auctions, small ﬁrms
JEL Classification: D44, G34
Suggested Citation: Suggested Citation