<p>With the help of a former fellow student I was able to find out some details.</p>
<p>The anecdote was about the following three companies:</p>
<ul>
<li><a href="https://en.wikipedia.org/wiki/Macy%27s,_Inc." rel="nofollow noreferrer">Macy's, Inc.</a></li>
<li><a href="https://en.wikipedia.org/wiki/Robert_Campeau" rel="nofollow noreferrer">Robert Campeau</a></li>
<li>Federated (covered in the article about Macy's)</li>
</ul>
<p>Some news coverage exists:</p>
<ul>
<li><a href="https://mindyourdecisions.com/blog/2011/09/20/when-game-theory-backfires-a-case-study-of-robert-campeaus-takeover-bid/" rel="nofollow noreferrer">https://mindyourdecisions.com/blog/2011/09/20/when-game-theory-backfires-a-case-study-of-robert-campeaus-takeover-bid/</a></li>
<li><a href="https://archive.fortune.com/magazines/fortune/fortune_archive/1990/06/18/73686/index.htm" rel="nofollow noreferrer">https://archive.fortune.com/magazines/fortune/fortune_archive/1990/06/18/73686/index.htm</a></li>
</ul>
<p>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 <span class="math-container">$\frac {0.5}{x} * \\\$74 + \frac {x - 0.5}{x} * \\\$60$</span> with <span class="math-container">$x$</span> 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.</p>
<p>I am very grateful for having had the opportunity to attend <a href="https://www.mmis.informatik.uni-rostock.de/staff/" rel="nofollow noreferrer">Prof. Kirste's</a> lectures at the <a href="https://www.uni-rostock.de/" rel="nofollow noreferrer">Universität Rostock</a>. They were full of impressive details like this gem here.</p>

CC BY-SA 4.0
2021-04-26T06:29:15.473Z
2021-04-28T08:00:55.153Z
2021-04-28T08:00:55.153Z
Max Görner
<p><a href="https://en.wikipedia.org/wiki/Pyrrhic_victory" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/Pyrrhic_victory</a></p>
<p>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.</p>
<p><a href="https://en.wikipedia.org/wiki/Dollar_bill_auction" rel="nofollow noreferrer">https://en.wikipedia.org/wiki/Dollar_bill_auction</a></p>
<p>This is somewhat similar situation in auctions</p>

CC BY-SA 4.0
2020-12-11T08:23:31.707Z
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.
Max Görner
CC BY-SA 4.0
2020-12-11T13:21:08.203Z
I realised it later. I wanted to delete my answer, but didnt find how
Surprised Seagull
CC BY-SA 4.0
2020-12-09T15:16:16.537Z
2020-12-09T15:16:16.537Z
Surprised Seagull
<p>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.</p>
<p>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.</p>
<p>Here we go:</p>
<ol>
<li>Two companies, A and B, competed about to acquire a third one.</li>
<li>The bid war happened at least 10 years ago, maybe more.</li>
<li>The bid war ended in a hostile takeover.</li>
<li>Company A offered a fixed amount. I am not sure, but that offer might have been valid only if enough shareholders accepted it.</li>
<li>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.</li>
<li>B's offer was dominating A's offer. B won the hostile takeover.</li>
<li>In the end, shareholders received less for their shares than what A offered initially. (<em>This is the crazy thing about this bid war</em>).</li>
</ol>
<p>I was unable to translate that list in sufficient search terms. Does it ring a bell for someone?</p>

<game-theory><auctions>
Whats the name of the famous hostile takeover where the winner payed less than the loser
Max Görner
# Whats the name of the famous hostile takeover where the winner payed less than the loser

(Asked by: username_0 on 2020-12-08)

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?

**Tags:** game-theory, auctions


---

## 2 answers

### Answer by username_0 on 2021-04-26. Score: 1 | Accepted answer

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

The anecdote was about the following three companies:

* [Macy's, Inc.](https://en.wikipedia.org/wiki/Macy%27s,_Inc.)
* [Robert Campeau](https://en.wikipedia.org/wiki/Robert_Campeau)
* Federated (covered in the article about Macy's)

Some news coverage exists:

* <https://mindyourdecisions.com/blog/2011/09/20/when-game-theory-backfires-a-case-study-of-robert-campeaus-takeover-bid/>
* <https://archive.fortune.com/magazines/fortune/fortune_archive/1990/06/18/73686/index.htm>

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](https://www.mmis.informatik.uni-rostock.de/staff/) lectures at the [Universität Rostock](https://www.uni-rostock.de/). They were full of impressive details like this gem here.


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### Answer by username_1 on 2020-12-09. Score: -1

<https://en.wikipedia.org/wiki/Pyrrhic_victory>

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.

<https://en.wikipedia.org/wiki/Dollar_bill_auction>

This is somewhat similar situation in auctions

> **Comments:**
> **username_0**: 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.  
> **username_1**: I realised it later. I wanted to delete my answer, but didnt find how  

---

