Cultural Determinants of M&A Returns: How Fairness Opinions by Boutique Firms Affect Value

Seitz, Anna, McIntire School of Commerce, University of Virginia
Wilhelm, William, McIntire School of Commerce, University of Virginia

In recent years, an increasing amount of attention has been drawn to boutique investment banks as they climb industry league tables. I examine the difference between boutique and full- service firms, and whether cultural distinctions can be seen through the transactions they advise on. I use announcement period returns to determine the effect of differences in an acquirer’s investment bank on transaction returns. First, I find that transactions that have at least one boutique as a buy-side advisor have 2.8% higher returns than transactions entirely run by full-service banks. Second, I demonstrate the contradictory negative impact that a boutique has as a provider of buy- side fairness opinions. I interpret this to mean that both with and without providing a fairness opinion, boutiques are perceived to act differently than full-service firms, and often act as a check against potential conflicts of interest.

BSC (Bachelor of Science in Commerce)
Financial advisor, boutique, fairness opinion, merger, corporate culture, announcement return

Global Commerce Scholar

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