TY  - JOUR
AU  - Calomiris,Charles W.
AU  - Hitscherich,Donna M.
TI  - Banker Fees and Acquisition Premia for Targets in Cash Tender Offers: Challenges to the Popular Wisdom on Banker Conflicts
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11333
PY  - 2005
Y2  - May 2005
UR  - http://www.nber.org/papers/w11333
L1  - http://www.nber.org/papers/w11333.pdf
N1  - Author contact info:
Charles W. Calomiris
Graduate School of Business
Columbia University
3022 Broadway Street, Uris Hall
New York, NY 10027
Tel: 212/854-8748
Fax: 212/316-9219
E-Mail: cc374@columbia.edu

Donna Hitscherich
E-Mail: dmh9@columbia.edu
AB  - We analyze data on fees paid to investment bankers and acquisition premia paid for targets in cash tender offers. Our results are broadly consistent with the predictions of a benign view of the role of investment banks in advising acquisition targets.  Fees to investment banks are correlated with attributes of transactions and target firms in ways that make sense if banks are being paid for processing information. The more contingent (and, therefore, risky) the fees, the higher they tend to be, all else held constant.  Variation in acquisition premia also can be explained by fundamental deal attributes.  Contrary to the jaundiced view of fairness opinions, greater fixity of fees is not associated with higher acquisition premia, and there is no evidence that investment banks are suborned by acquirors with whom they have had a prior banking relationship.
ER  -