Peer selection and valuation in mergers and acquisitions

• 成果类型: Article
• 署名作者: Eaton, Gregory W.; Guo, Feng; Liu, Tingting; Officer, Micah S.
• 署名单位: Oklahoma State University System; Oklahoma State University - Stillwater; Iowa State University; Loyola Marymount University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.09.006
• 发表日期: 2022
• 页码: 230-255
• 关键词: Mergers and acquisitions; VALUATIONS; Investment banks; Comparable companies analysis; Takeover premiums

摘要

Using unique data, this paper examines investment banks' choice of peers in comparable companies analysis in mergers and acquisitions. We find strong evidence that product mar-ket space is amongst the most important factors in peer selection, but Standard Industrial Classification (SIC) codes, particularly three and four digit codes, do a poor job of catego-rizing related firms in this setting. Banks strategically select large, high growth peers with high valuation multiples, factors that are also positively related to premiums. Our evidence is consistent with target-firm advisors selecting peers with high valuation multiples to ne-gotiate higher takeover prices.(c) 2021 Elsevier B.V. All rights reserved.