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Guhan Subramanian, The Drivers of Market Efficiency in Revlon Transactions, 28 J. Corp. L. 691 (2003).

Abstract: In this Commentary I present evidence from our seventeen years of experience with Revlon that is consistent with the view that incentives to search have remained strong in the U.S. market for corporate control (MCC), despite this potential “Revlon Problem.” I then identify three potential explanations for this finding: small net first-bidder costs, preemptive bidding, and heterogeneous buyers. These three “drivers” might explain how value-creating transactions were achieved in the 1990s MCC despite the potentially onerous requirements of Revlon.