Conflicts Of Interest In Merger Advisory Services
- Topics:
- Mergers
- Tags:
- Bank,
- Finance,
- Financial Services,
- Investment,
- Merger,
- Merger Announcement,
- Mergers & Acquisitions,
- Social Science Electronic Publishing Inc.
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Overview: From the executive summary: ‘Conflicts of interest in combining lending with the merger advisement of acquiring firms are found using two separate methodologies. First, commercial banks that advise acquirers with which they have had a prior lending relationship experience a significantly negative abnormal return, averaging 37 basis points over the three-day period surrounding the merger announcement date. Second, syndicated bank loans that are arranged by the acquirer's advisor after the merger announcement date trade at a significant discount in the secondary market, averaging 4.15%, as compared with syndicated bank loans arranged by banks with no advisory role.’
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Format: PDF | Size: 701KB | Date: Jan 2004 | Pages: 38
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