Merger Waves and the Importance of Financial Advisors Reputation for Acquirers

37 Pages Posted: 19 Oct 2017

See all articles by José Afonso Faias

José Afonso Faias

Catholic University of Portugal (UCP)

Date Written: March 19, 2017

Abstract

There is mixed evidence on the value of top-tier advisors for acquirers. Based on 7,192 U.S merger and acquisitions deals between 1980 and 2015, we reconcile previous contradictory findings by showing that top-tier advisors are associated with higher acquirer returns for public and private targets but only in periods of merger waves. Nevertheless, top-tier advisors demand a premium fee for their services both in and out of merger waves. They work as a certification mechanism when there is investors’ limited attention and greater uncertainty in the market.

Keywords: Mergers and Acquisitions, Top-Tier Advisors

JEL Classification: G34

Suggested Citation

Faias, José, Merger Waves and the Importance of Financial Advisors Reputation for Acquirers (March 19, 2017). Available at SSRN: https://ssrn.com/abstract=3055582 or http://dx.doi.org/10.2139/ssrn.3055582

José Faias (Contact Author)

Catholic University of Portugal (UCP) ( email )

Palma de Cima
Lisboa, 1649-023
Portugal

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