Corporate acquisition process: Is there an optimal cash-equity payment mix?

► This paper examines the combination of cash and share payments in the context of an acquisition process. ► We highlight that setting the conditions of payment is an endogenous part of a takeover agreement between the acquirer and the target. ► The mix of payment conveys private information on the gains of synergy and the gains that result from the transaction. ► In the model, we internalize asymmetries of information and possible exaggeration biases.