Does Hiring M & A Advisers Matter for Private Sellers?

Published In

Quarterly Journal of Finance

Document Type

Citation

Publication Date

3-11-2023

Abstract

M&A advisers can find and negotiate better deals for sellers, but hiring them entails fees and potential agency costs. Using a novel, hand-collected dataset on the hiring of seller advisers for a large sample of M&A deals, we find that private sellers use advisers or top-tier advisers when it makes economic sense. After accounting for this selection effect, advisers and top-tier advisers positively affect deal valuations. We find some evidence that acquirers’ announcement returns are lower in deals where private sellers use advisers. Our findings suggest that M&A advisers can find and negotiate better deals for private sellers.

Rights

© 2023 World Scientific Publishing Co Pte Lt

DOI

10.1142/S2010139223500040

Persistent Identifier

https://archives.pdx.edu/ds/psu/39733

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