The Role of Boutique Advisers in Fairness Opinions

In this study, we investigate the role of boutique advisers in the provision of fairness opinions (FOs) in M&A transactions. Using a hand-collected sample of US M&A transactions between 2005 and 2016 and an instrumental variable approach to address endogeneity in adviser selection, we find that boutique advisers provide more precise FOs than non-boutique advisers, consistent with their greater independence and industry specialization. However, this improved precision is attenuated for boutique advisers with prior ties to the acquiring firm, suggesting that such ties create conflicts of interest that compromise FO quality. We further find that more precise FOs are associated with timelier deal completion, consistent with target shareholders valuing precise FO disclosures when making their tendering or voting decisions. Collectively, our findings highlight the importance of adviser type and FO precision as determinants of disclosure quality and transaction efficiency in M & A markets.