The effect of M&A advisors’ opinions on acquirer shareholder voting

• Focus on detailed financial advisory opinions.
• Only target advisors’ opinions positively affect acquirer shareholder voting.
• Acquirer advisors provide more optimistic opinions.
• Acquirer advisors’ opinions are negatively related with post-merger performance.
• Target advisors’ opinions do not seem to be overly optimistic.

Recent studies find that merger advisors, in particular those of the acquirer, often face conflicts of interest and present overly optimistic opinions about a deal. It is not clear, however, whether and how these opinions affect shareholders’ voting decisions regarding a deal. The main findings indicate that target advisors’ opinions but not those of acquirer advisors, significantly influence the acquirer shareholders’ approval rate. Acquirer advisors’ opinions tend to be more optimistic, especially when the deal announcement intrigues negative market reaction. However, these opinions are negatively related to the post-merger performance. This paper concludes that acquirer shareholders are able to discern the potential conflicts of interest of merger advisors and follow the advice of more conservative target advisors.