Competitive bids – What makes the difference – Is price really all that matters?

Eight targets were the subject of a competitive bid process in 2015 (representing 13 of the 40 deals in our sample). There was no clear common factor which contributed to the success of a deal in a competitive scenario which once again raises the question of whether it is just a matter of 'highest price wins'.

Unsurprisingly from the target's perspective, a competitive bidding process brought bigger price increases, with bidders increasing their prices (as against the amount initially proposed or offered) by 18% in competitive deals as opposed to 11% for non-competitive deals.

Unlike in previous years where regulatory conditions or other factors affecting the certainty of deals appeared to weigh heavily on directors' decisions, in 2015 the bid price appeared to be the key influencing factor in each board's decision to support an offer (including favouring scrip over cash where the implied value of scrip was greater). In addition to price, we also looked at other