In certain public company acquisitions of failed banks, the buyer's common stock prices increased, sometimes materially, on the Monday following the announcement of an FDIC-assisted acquisition after the close of the markets on the preceding Friday.
Monday morning public offerings were sometimes launched following a failed bank acquisition, in part upon the issuer's prospects and the strength of its stock price resulting from the FDIC-assisted acquisition.
The FDIC, to reduce the DIF's cost of resolutions, began to consider VAIs as possible means to capture some of such stock market gains. At the same time, bidders saw VAIs as a way to distinguish their bids from other bids in a competitive bidding process.
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