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Leverage and Privatization

Abstract : This paper studies privatization methods when potential buyers can lever up strategically to maximize their probability of winning. We endogenize the optimal fraction of shares to be auctioned off when privatizing a company. There is a close correlation between the optimal fraction of shares to be sold off and the auction winner's debt level and hence the risk of bankruptcy.
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https://hal.archives-ouvertes.fr/hal-00447996
Contributor : Christian At Connect in order to contact the contributor
Submitted on : Monday, January 18, 2010 - 10:37:30 AM
Last modification on : Wednesday, December 8, 2021 - 11:28:02 AM

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  • HAL Id : hal-00447996, version 1

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Christian At, Pierre-Henri Morand. Leverage and Privatization. Journal of Law, Economics, and Organization, Oxford University Press (OUP), 2012, 28, pp.32-44. ⟨hal-00447996⟩

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