Does Hiring M&A Advisers Matter for Private Sellers?

Anup Agrawal, Tommy Cooper (), Qin Lian () and Qiming Wang ()
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Anup Agrawal: Culverhouse College of Business, University of Alabama, Tuscaloosa, AL 35487-0224, USA
Tommy Cooper: Add Source Group LLC, 3018 Panorama Brook Circle, Birmingham, AL 35216, USA
Qin Lian: Portland State University, School of Business Administration, Portland, OR 97207-0751, USA
Qiming Wang: Willamette University, Atkinson Graduate School of Management, Salem, OR 97301, USA

Quarterly Journal of Finance (QJF), 2023, vol. 13, issue 01, 1-45

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 (search for similar items in EconPapers)
JEL-codes: G24 G34 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1142/S2010139223500040

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