Takeover auctions

Takeover auctions differ from traditional auctions where potential buyers usually know the value of the company they are trying to acquire. In contrast, takeover auctions can be very unpredictable. Potential buyers can only estimate the value of the target firm. The precision of such estimates also depends on their relationship with the firm’s management team.

When the shares of the target firm are traded on the market, a potential buyer may decide to acquire some of the firm’s shares, also called a toehold, before making a bidding offer. Such a strategic move can influence the buyer to either acquire the company for a lower price or sell those shares at a competitive price.

What’s this research project about?

Yuri Khoroshilov, Associate Professor at the University of Ottawa's Telfer School of Management, will examine how the potential buyer’s information advantage affects the outcome of takeover auctions that involve toeholds. His research is supported by a Social Sciences and Humanities Research Council (SSHRC) Insight grant.

Who will gain from this research?

By revealing the impact of the bidders’ information advantage on takeover actions, Professor Khoroshilov’s research will help researchers and professionals in finance better understand bidding behaviors in takeover auctions.

The Telfer School of Management is committed to developing cutting-edge research in a variety of topics in management. As our faculty continues fostering research excellence, the Telfer School community and partners also benefit from valuable insights with impact. Over the next weeks, we will give an overview of the five research projects that received the prestigious SSHRC Insight grant in 2019.

Learn more about the SSHRC Insight Program.

“Postdoctoral fellows play a vital role in our research enterprise and, by supporting their research, we will foster research excellence and leadership. This is why we decided to create the SMRG Postdoctoral Research Fellowship Support Grant.” Wojtek Michalowski, Vice-Dean, Research.

Danial Khorasanian is the first postdoctoral fellow to receive a SMRG Postdoctoral Research Fellowship Support Grant. He will leverage his expertise in industrial engineering to develop mathematical and optimization methods that could support home care organizations in their efforts to deliver timely services in cost-effective ways.

Scheduling Challenges in Home Care Services

When processing a new patient request for home care services, health care providers must be prepared to make several complex decisions. For instance, if new requests are accepted, health providers have to assign each patient to a nurse and route the daily visits for each nurse. Every patient is unique and requires a specific care. As a result, a nurse will not visit all patients for the same amount of time and frequency.

When health organizations are not able to provide nurses with an efficient schedules and itineraries for their daily home visits, these inefficiencies compromise the quality of home care services and drive up related costs. These challenges also result in delays in the discharge of hospital patients whose health needs could be met by home care services.

How will the project help health providers navigate these challenges?

Last year, Khorasanian started working with Professors Jonathan Patrick and Antoine Sauré to develop a mathematical model that could support health care providers in determining optimum visit schedules and travel itineraries for nurses. To build a model that considers the multiple sources of uncertainty faced by health care providers, Khorasanian had to develop a complex mathematical formulation. The research team will test the model in collaboration with Carefor, a not-for-profit home health care provider.

What’s the potential impact of this project?

“Once we have tested and implemented the model, home care organizations could use it to maximize the satisfaction of both patients and nurses at minimum cost. By overcoming the uncertainties related to the development of nurses’ visit schedules and travel itineraries, the model will also help health managers run acute care services more smoothly,” explains Khorasanian.

Two faculty members have been each awarded a Telfer School of Management Research grant (SMRG) for projects that will address important topics around workplace relationships and digital technologies. Keep reading to find out more about the relevance, goals, and future applications of their specific research projects.

The Give and Take of Negotiation Relationships

Successful negotiations rely on building productive relationships with colleagues, clients, and business partners. Effective negotiation skills are invaluable, whether we use those skills to decide where to meet a colleague for coffee or to choose the right strategy to navigate a project. However, despite the importance and frequency of negotiations in the workplace, researchers lack a systematic understanding of the interpersonal relationships between negotiating parties. Can social exchange help to explain the dynamic nature of negotiations in the workplace?

Assistant Professor A. J. Corner will develop and test a new scale for measuring the quality of social exchanges at different stages of the negotiation process.

Seizing FinTech Opportunities in Converging Industries

The Internet of Things, artificial intelligence, blockchain and other disruptive digital technologies are revolutionizing businesses. This digital transformation has had a great toll on traditional businesses like local newspapers, music retailers, and analog photographers. To survive this technological craze, businesses must be able to blend new technologies with their traditional structure. Start-ups and incumbent firms will have to work together to produce new business models. Their partnerships are allowing these new ventures to explore cutting-edge opportunities.

Associate Professor Wadid Lamine will study how disruptive digital technologies affect traditional industries and how start-ups and incumbent firms are driven to co-develop new business models in response to emerging digital technologies.

Who will benefit from these new projects?

“This project will provide valuable insights for academics and practitioners, leading to a better understanding of relationship-building at different stages of the negotiation process and driving improved negotiation outcomes based on high-quality relationships.”

A.J. Corner

 

“New business models are needed to tackle the radical demands of an increasingly digital world. In this movement towards a globalized digital economy, this project will contribute to our understanding of how start-ups and incumbent firms can converge and prosper from broader and more diverse business opportunities. This will support their survival and success.”

Wadid Lamine

Darlene Himick, Associate Professor at the Telfer School of Management, is a top-notch scholar who has contributed significantly to advancing research on the topics of pension accounting, responsible investing by pension funds, and the use of experts during standard setting. Her research expertise also includes accounting history and the accounting profession. Professor Himick’s high-caliber research is demonstrated through her SSHRC funded projects, as well as recent publications in Accounting, Organization, and Society; and Accounting, Auditing and Accountability Journal; and other highly reputable journals.

Professor Himick not only creates knowledge relevant to the academic community, but also addresses current issues that ultimately support regulatory accounting organizations and professionals in their efforts to improve accounting practices. For instance, one of her studies looked at how market-based approaches form outside of the accounting profession have been transforming traditional accounting. Such trends can lead to significant changes in government accounting practices, particularly how governments evaluate pension plans and other liabilities.

In her latest article, Professor Himick examines how the Canadian Professional Accounting body encourages accountants to think about ethics-related issues. In accounting, ethics has always been thought of as a trade-off between acting for a higher, “professional calling” or self-interest (lucrative reasons or reputation). Her study shows that the CPA uses their membership magazine to describe what can be considered morally acceptable in a variety of practical situations that accountants may encounter.

Whether it is a reflection on recent transformations of traditional accounting practices or discussions about ethically responsible behaviors in the profession, insights from Professor Himick’s research can have a great impact on the accounting community. For her commitment to developing high-impact research on practically relevant topics, she is the recipient of the Telfer School of Management’s Research Excellence award in 2019.