MANAGEMENT PERSPECTIVE ACQUISITIONS: CAN YOU AVOID THE WINNER'S CURSE?

Phillip A. Ellis, Mark Gallion Booz, Allen & Hamilton Dallas In recent years, industry managers and observers have referred to "winner's curse" or "greater fool" theories in the acquisitions market to explain high prices paid by many companies for U.S. hydrocarbon reserves. As a result, many companies have formed a "Catch 22" attitude toward such purchases: The main way to successfully make acquisitions is to overpay. Therefore, the only winners must be the sellers, who pocket the cash

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