The Role of Independent Expert Reports in Australian M&A Market

Research output: Contribution to journalArticle

Abstract

This paper examines the role of independent expert reports in Australian M&A market. Using a comprehensive sample of 2888 transactions between 1991 and 2013, I find that a “neither fair nor reasonable” opinion forces the acquirer to increase the offer premium by 5%, ceteris paribus. The finding remains robust after controlling for the target's bargaining power measured by the residual values of initial premiums that are not explained by observable firm-deal characteristics. The target that has a weak bargaining position tends to receive less effect of an unfavorable report. In addition, a “fair and reasonable” opinion increases the probability of success, while the unfavorable report does not affect the transaction outcome. I identify the causal effect of expert opinions by differences-in-differences analysis using the Duke case decision.

Original languageEnglish
Pages (from-to)149-167
Number of pages19
JournalInternational Review of Finance
Volume18
Issue number2
DOIs
Publication statusPublished - 2018 Jun

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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