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Does Hiring M&A Advisers Matter for Private Sellers?

Author

Listed:
  • 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)

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.

Suggested Citation

  • Anup Agrawal & Tommy Cooper & Qin Lian & Qiming Wang, 2023. "Does Hiring M&A Advisers Matter for Private Sellers?," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 13(01), pages 1-45, March.
    • Handle: RePEc:wsi:qjfxxx:v:13:y:2023:i:01:n:s2010139223500040
    DOI: 10.1142/S2010139223500040
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    More about this item

    Keywords

    M&A; private sellers; M&A advisers; acquisition premium;
    All these keywords.

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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