Does Hiring M & A Advisers Matter for Private Sellers?
Quarterly Journal of Finance
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.
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Agrawal, A., Cooper, T., Lian, Q., & Wang, Q. (2023). Does Hiring M&A Advisers Matter for Private Sellers? The Quarterly Journal of Finance. https://doi.org/10.1142/s2010139223500040