In my studies I learned about a bid war ending in a hostile takeover where the winner ended up paying less than the loser offered. It is a very nice demonstration of elements of game theory so I would like to reread that again and to recommend it to a friend.

Unfortunately, I cannot find it in the internet regardless of what search terms I try. I will state the details I remember. I would be very glad if the answer could tell which companies were included so I can research the interesting details.

Here we go:

  1. Two companies, A and B, competed about to acquire a third one.
  2. The bid war happened at least 10 years ago, maybe more.
  3. The bid war ended in a hostile takeover.
  4. Company A offered a fixed amount. I am not sure, but that offer might have been valid only if enough shareholders accepted it.
  5. Company B offered a higher amount regardless of enough shareholders accepting it. However, if a certain number of shares were reached, the offered price was reduced linearly.
  6. B's offer was dominating A's offer. B won the hostile takeover.
  7. In the end, shareholders received less for their shares than what A offered initially. (This is the crazy thing about this bid war).

I was unable to translate that list in sufficient search terms. Does it ring a bell for someone?


2 Answers 2


With the help of a former fellow student I was able to find out some details.

The anecdote was about the following three companies:

Some news coverage exists:

In short, Macy's offered \$67 per share contingent on getting a majority of shares. Campeau offered \$74 per share if less than half was tendered, otherwise $\frac {0.5}{x} * \\\$74 + \frac {x - 0.5}{x} * \\\$60$ with $x$ the fraction of shares offered to Campeau. It seems as if the bidding war continued a bit after this scheme. The prices given in the blog above differ, I am sticking to these from the lecture.

I am very grateful for having had the opportunity to attend Prof. Kirste's lectures at the Universität Rostock. They were full of impressive details like this gem here.



Probably you are looking for this term. Today It describes any situation where a win is achieved at a such a large cost that it is likely that loosing was more profitable.


This is somewhat similar situation in auctions

  • $\begingroup$ I fear its not a Pyrrhic victory. As far as I remember, Company B was very proud of itself. I mean: They managed to takeover by paying less than Company A offered. $\endgroup$ Dec 11, 2020 at 8:23
  • $\begingroup$ I realised it later. I wanted to delete my answer, but didnt find how $\endgroup$ Dec 11, 2020 at 13:21

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