The Valuation Impact of Financial Advisors: An Empirical Analysis of REIT Mergers and Acquisitions

This paper analyzes the effect of financial advisor-monitors on the valuation of real estate investment trust (REIT) mergers. Advisor choice determinants and the effect of advisors on transaction value are examined using a sample of REIT mergers for the 1981 to 2001 period. A two-stage target firm p...

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Veröffentlicht in:	The Journal of real estate research 2007-01, Vol.29 (1), p.57-74
Hauptverfasser:	Daniels, Kenneth, Phillips, Richard A.
Format:	Artikel
Sprache:	eng
Schlagworte:	Acquisitions Acquisitions & mergers Advisors Analytical estimating Coefficients Corporate mergers Costs Divestiture Efficiency Empirical tests Financial analysis Financial planners Financial services Financial transactions Information asymmetry Investment banking Investment trusts Investments Market shares Mergers Mills ratio Modeling Real estate investment trusts Real estate market REITs Studies Valuation Variables Wealth effect
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Beschreibung
Zusammenfassung:	This paper analyzes the effect of financial advisor-monitors on the valuation of real estate investment trust (REIT) mergers. Advisor choice determinants and the effect of advisors on transaction value are examined using a sample of REIT mergers for the 1981 to 2001 period. A two-stage target firm pricing model is estimated: the first stage (logit) estimates the probability of advisor use and the second stage analyzes the effect of advisors on target firm valuation. The results indicate that financial advisor monitoring, possibly by reducing information asymmetries, has significant positive effects on the value of REIT acquisitions.
ISSN:	0896-5803 2691-1175
DOI:	10.1080/10835547.2007.12091189