Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
We examine the use of breakup fees as a device for target firms to recruit white knights in response to a hostile takeover bid. When bidders have interdependent valuations of the target, the possible use of a breakup fee to subsidize entry of a subsequent bidder overdisciplines the initial bidder's preemption and results in excessive entry by a second bidder.