One of the splashiest manifestations of today’s more competitive dealmaking landscape is the rival bid, and the upcoming auction between Carlyle and Philip Morris International (NYSE: PM) promises to be a case study in the dynamics of the current seller’s market. One thing investors should watch as the bids inch higher—the buyer’s plan to realize returns.

There is plenty of tinder to stoke the blazes of recent M&A. “The stock market has been strong with PE multiples and valuations at historical highs,” reasons Monroe Capital CEO and president Ted Koenig.  “The popularity of SPACs has driven a feeding frenzy for high quality acquisition targets.  Add to all that, discussions of potential increased income tax rates and a higher capital gains tax, and this creates more fuel on the fire for dealmaking now.”

How high the blazes burn in the recent auction is anyone’s guess. Months after Carlyle agreed to acquire inhaler maker Vectura Group in May, Philip Morris swooped in with a higher offer. Carlyle then sweetened its bid, only to be topped by the strategic’s rebid. The U.K. Takeover Panel intervened to structure a formal auction process for Vectura, which could cost the bidders further: the latest Philip Morris bid already represents a 21 percent premium to the price Carlyle initially agreed to pay.

These dynamics have sent private equity firms looking for ways to pre-empt auctions, often tapping networks to source deals in geographies less covered by rivals and relying on relationships to sniff out sellers well ahead of the distribution of information memoranda. Buyers are also pivoting to contingent payouts and touting the value of their partner networks to avoid paying eye-watering multiples.

When that fails, investors will need to watch PE for the return profile of its investments. How long can the asset class sustain stellar returns when contested auctions cause deal multiples to soar? The public takeover battle is the latest case study.