Abstract
Investment banks play an important role in the M&A world. Although investment banks are a necessary part of transactions, we argue that they should never be used to establish valuation. In this chapter, we discuss the incentives, fee structures, and the role of investment banks in closing successful deals. For the managers of companies preparing for an M&A, it is critical to understand the key pillars of valuation and value creation. Otherwise, they will not be informed contributors to the discussion.
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Notes
- 1.
Arik Hesseldahl, “HP’s $5 Billion Fraud Lawsuit against Former Autonomy Executives Is Now Public.” Recode, May 5, 2015.
- 2.
Michael Bobelian, “HP’s $8.8 Billion Fiasco Exposes Flaws in M&A Process.” Forbes, November 21, 2012.
- 3.
By Nadia Damouni and Nicola Leske, “In HP-Autonomy debacle, many advisers but little good advice.” Reuters.com, November 21, 2012.
- 4.
Ibid.
- 5.
Dana Mattioli, “An Investment Banker’s Worst Nightmare; More companies are deciding to do without bankers when they make acquisitions.” The Wall Street Journal, May 10, 2016.
- 6.
Ibid.
- 7.
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Fernandes, N. (2019). Don’t Rely on Investment Banks for Valuation. In: The Value Killers. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-12216-4_1
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DOI: https://doi.org/10.1007/978-3-030-12216-4_1
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