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Recent research finds that managers of public firms overpay for acquisitions relative to private equity acquirers and that the public acquirer ulterior motives explain the apparent overpayment. I find that, in sharp contrast to the existing literature, the difference in what public firm managers are willing to pay for their targets can be attributed to efficiency motives (using the propensity score matching to remove a significant amount of bias from the sample allows for cleaner comparisons). Additional support for these results is found by examining transactions in which both public and private equity firms are bidding on the same target. Copyright © 2012 John Wiley & Sons, Ltd.