Skip to main content

Research Repository

Advanced Search

When It Pays to Pay Your Investment Banker: New Evidence on the Role of Financial Advisors in M&As

Golubov, Andrey; Petmezas, Dimitris; Travlos, Nickolaos G.

Authors

Andrey Golubov

Nickolaos G. Travlos



Abstract

We provide new evidence on the role of financial advisors in M&As. Contrary to prior studies, top-tier advisors deliver higher bidder returns than their non-top-tier counterparts but in public acquisitions only, where the advisor reputational exposure and required skills set are relatively larger. This translates into a $65.83 million shareholder gain for an average bidder. The improvement comes from top-tier advisors' ability to identify more synergistic combinations and to get a larger share of synergies to accrue to bidders. Consistent with the premium price–premium quality equilibrium, top-tier advisors charge premium fees in these transactions.

Citation

Golubov, A., Petmezas, D., & Travlos, N. G. (2012). When It Pays to Pay Your Investment Banker: New Evidence on the Role of Financial Advisors in M&As. Journal of Finance, 67(1), 271-312. https://doi.org/10.1111/j.1540-6261.2011.01712.x

Journal Article Type Article
Online Publication Date Jan 17, 2021
Publication Date 2012-02
Deposit Date Aug 2, 2020
Journal Journal of Finance
Print ISSN 0022-1082
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 67
Issue 1
Pages 271-312
DOI https://doi.org/10.1111/j.1540-6261.2011.01712.x
Public URL https://durham-repository.worktribe.com/output/1265085