Does Hiring M&A Advisers Matter for Private Sellers?

Quarterly Journal of Finance, Forthcoming

56 Pages Posted: 26 Feb 2014 Last revised: 30 Jan 2023

See all articles by Anup Agrawal

Anup Agrawal

University of Alabama - Culverhouse College of Commerce & Business Administration

Tommy Cooper

University of Alabama - Department of Economics, Finance and Legal Studies

Qin Lian

Portland State University

Qiming Wang

Willamette University - Atkinson Graduate School of Management

Date Written: January 24, 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.

Keywords: M&A; Private Sellers; M&A Advisers; Acquisition Premium

JEL Classification: G24, G34

Suggested Citation

Agrawal, Anup and Cooper, Tommy and Lian, Qin and Wang, Qiming, Does Hiring M&A Advisers Matter for Private Sellers? (January 24, 2023). Quarterly Journal of Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2400531 or http://dx.doi.org/10.2139/ssrn.2400531

Anup Agrawal (Contact Author)

University of Alabama - Culverhouse College of Commerce & Business Administration ( email )

Culverhouse College of Business
EFLS, Box 870224
Tuscaloosa, AL 35487-0224
United States
205-348-8970 (Phone)
205-348-0590 (Fax)

HOME PAGE: http://aagrawal.people.ua.edu/

Tommy Cooper

University of Alabama - Department of Economics, Finance and Legal Studies ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States

Qin Lian

Portland State University ( email )

United States
5037253728 (Phone)

Qiming Wang

Willamette University - Atkinson Graduate School of Management ( email )

900 State Street
Salem, OR 97301
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
1,402
Abstract Views
8,731
Rank
26,145
PlumX Metrics