Top-Tier investment banks and their advisory impact on UK M&A shareholder value

Abstract

This master dissertation provides some evidence on the effect of advisor reputation in M&A on bidder CARs for the UK, in which financial advisors of top-tier investment banks influence bidder CARs by 1.26%, ceteris paribus. Existing literature reports an insignificant or at best, neutral relationship between the financial advisor involved and the bidder CARs, while new evidence has been recently provided on public deals for the US, in which the choice of advisor is associated with a 1.53% bidder CAR improvement. As to date only little research has been conducted on the European market and to test the premium price-premium quality hypothesis on bidder CAR, as well as advisory fees, the UK has been used as a pilot, giving further implications on the European market setting through cross-border deals.