A study of about 2,000 M&A deals from 2006 to 2016 suggests that acquirers should pay closer attention to the fairness opinions third-party analysts provide. The study’s author, Matthew Shaffer, a doctoral candidate at the Harvard Business School, finds that differences between actual deal prices and the valuations estimated by third-party analysts consistently predict whether acquirers will eventually be forced to write down their goodwill over the following five years. The study examines the usefulness and the bias of fairness opinion valuations and finds “tight evidence for both.” The study is discussed in the paper, “Truth and Bias in M&A Target Fairness Valuations: Appraising the Appraisals.”
Extra: Hundreds of fairness opinions are at your fingertips if you use BVR’s Fairness Opinion Research Service (FORS). It gives you full access to actual fairness opinions from around the world, searchable by any data point or field.