The role of investment banks in M&A transactions: Fees and services

Walter, TS; Yawson, A; Yeung, CP

The role of investment banks in M&A transactions: Fees and services

Walter, TS Yawson, A Yeung, CP

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Publisher:: Elsevier
Publication Type:: Journal Article
Citation:: Pacific-Basin Finance Journal, 2008, 16 pp. 341 - 369
Issue Date:: 2008-01

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Field	Value	Language
dc.contributor.author	Walter, TS	en_US
dc.contributor.author	Yawson, A	en_US
dc.contributor.author	Yeung, CP	en_US
dc.date.issued	2008-01	en_US
dc.identifier.citation	Pacific-Basin Finance Journal, 2008, 16 pp. 341 - 369	en_US
dc.identifier.issn	0927-538X	en_US
dc.identifier.uri	http://hdl.handle.net/10453/10109
dc.description.abstract	We examine the pricing and performance of advisers in M&A transactions. We determine adviser quality on the basis of a contemporaneous market share measure and show that high quality advisers receive higher M&A advisory fees. High quality advisers also complete deals faster, but their superiority is not reflected in increasing the likelihood of deal completion or delivering greater abnormal equity returns to their clients. It is well known that stock bids are received more negatively than cash bids, so we further partition the sample of acquirers by consideration type and examine the abnormal returns of each partition. We find that high quality investment banks are able to differentiate themselves by delivering greater abnormal returns to their acquirer clients in deals involving stock.	en_US
dc.publisher	Elsevier	en_US
dc.relation.ispartof	Pacific-Basin Finance Journal	en_US
dc.subject.classification	Finance	en_US
dc.title	The role of investment banks in M&A transactions: Fees and services	en_US
dc.type	Journal Article
utslib.citation.volume	16	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
utslib.copyright.status	closed_access
pubs.consider-herdc	false	en_US
pubs.volume	16	en_US

Abstract:

We examine the pricing and performance of advisers in M&A transactions. We determine adviser quality on the basis of a contemporaneous market share measure and show that high quality advisers receive higher M&A advisory fees. High quality advisers also complete deals faster, but their superiority is not reflected in increasing the likelihood of deal completion or delivering greater abnormal equity returns to their clients. It is well known that stock bids are received more negatively than cash bids, so we further partition the sample of acquirers by consideration type and examine the abnormal returns of each partition. We find that high quality investment banks are able to differentiate themselves by delivering greater abnormal returns to their acquirer clients in deals involving stock.

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http://hdl.handle.net/10453/10109