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
Date Written: January 24, 2023
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: Suggested Citation