Investment Banks as Insiders and the Market for Corporate Control

• 成果类型: Article
• 署名作者: Bodnaruk, Andriy; Massa, Massimo; Simonov, Andrei
• 署名单位: INSEAD Business School; University of Notre Dame; Michigan State University; Michigan State University's Broad College of Business
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhp043
• 发表日期: 2009
• 页码: 4989
• 关键词: EQUITY PRICES; acquisitions; arbitrage; mergers; OWNERSHIP; takeovers; BIAS

摘要

We study holdings in merger and acquisition (M&A) targets by financial conglomerates in which affiliated investment banks advise the bidders. We show that advisors take positions in the targets before M&A announcements. These stakes are positively related to the probability of observing the bid and to the target premium. We argue that this can be explained in terms of advisors who are privy to important information about the deal, investing in the target in the expectation of its price increasing. We document the high profits of this strategy. The advisory stake is positively related to the likelihood of deal completion and to the termination fees. However, these deals are not wealth creating: there is a negative relation between the advisory stake and the viability of the deal.