Value of your IPO Advisors Advice: M&A perspective
This paper addresses the role of financial advisors in firms acquisition activities. Motivated by anecdotal and documented evidence on the cases of fee generating motives in advisory business, we test whether the better established contacts of investment bankers with firms executives can boost the phenomenon of chasing deals and lead to value destruction at acquisitions. We investigate whether closer contacts between investment bankers and corporate management established at IPO, lead the firms to perform acquisitions characterized with negative market reaction. Bankers, who have underwritten companys IPO issue, have preferential access to its corporate executives, in that the banks can identify and pitch potential takeover targets deliberately and insistently. In line with the fee generating hypothesis, we find that the abnormal returns at acquisitions are lower for firms that went public with banks actively advising on M&As, and when the underwriters current M&A business is deteriorating.
Evgeny Plaksen
SFI,University of Zürich
国际会议
大连
英文
1-19
2008-07-02（万方平台首次上网日期，不代表论文的发表时间）