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The Role of Independent Expert Reports in Australian M&A Market

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  • Giang Duc Nguyen

Abstract

This paper examines the role of independent expert reports in Australian M&A market. Using a comprehensive sample of 2888 transactions between 1991 and 2013, I find that a “neither fair nor reasonable†opinion forces the acquirer to increase the offer premium by 5%, ceteris paribus. The finding remains robust after controlling for the target's bargaining power measured by the residual values of initial premiums that are not explained by observable firm†deal characteristics. The target that has a weak bargaining position tends to receive less effect of an unfavorable report. In addition, a “fair and reasonable†opinion increases the probability of success, while the unfavorable report does not affect the transaction outcome. I identify the causal effect of expert opinions by differences†in†differences analysis using the Duke case decision.

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  • Giang Duc Nguyen, 2018. "The Role of Independent Expert Reports in Australian M&A Market," International Review of Finance, International Review of Finance Ltd., vol. 18(2), pages 149-167, June.
    • Handle: RePEc:bla:irvfin:v:18:y:2018:i:2:p:149-167
    DOI: 10.1111/irfi.12142
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    Cited by:

    1. Anna Bedford & Martin Bugeja & Matthew Grosse, 2021. "The choice of financial advisory and independent expert services in takeovers: evidence in a setting where the services are independent," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(2), pages 3649-3683, June.
    2. Bedford, Anna & Bugeja, Martin & Czernkowski, Robert & Bond, David, 2023. "Is the effect of shared auditors driven by shared audit partners? The case of M&As," The British Accounting Review, Elsevier, vol. 55(2).

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