Finance Research Seminar – Professor Bjorn Espen Eckbo

Title: Are Bidder-Initiated Takeovers Opportunistic?

Date: 10 October 2025

Time: 13:00-15:00

Venue: NUBS.2.10

If you would like to attend, please register using the following link:

Are Bidder-Initiated Takeovers Opportunistic?

Speaker:   Professor Bjorn Espen Eckbo

Bjorn Espen Eckbo is the Tuck Centennial Professor of Finance at Tuck School of Business at Dartmouth College, USA. He studies corporate finance, with a particular emphasis on transactions in the market for corporate control (M&As and corporate restructurings), how firms raise capital to fund investments, capital structure choice, and issues in international corporate governance. Eckbo also currently serves as a research associate of the European Corporate Governance Institute and served as founding director of Tuck’s Lindenauer Center for Corporate Governance from 1999 through 2020. He teaches MBA electives in corporate finance and corporate takeovers at Tuck and a PhD course on corporate finance at the Norwegian School of Economics, where, in 2011, he was awarded an honorary doctorate. He is the recipient of the prestigious Batterymarch Fellowship in 1987 and numerous awards for his research publications. Before joining the Tuck faculty in 1998, Eckbo was a faculty member at the University of British Columbia (1981–1996) and at the Stockholm School of Economics (1996–98). In 2022, Woxsen University (Hyderabad, India) honored Eckbo by establishing the Bjorn Espen Eckbo Professorship in Corporate Finance. Based on citations and research impact, the data-analytics service ScholarGPS recently ranked Professor Eckbo among the top 15 researchers in the world contributing to the broad area of Corporate Finance.

Abstract:

By self-selecting the time to initiate the takeover process, an acquirer increases its chance of paying for the target with overpriced shares, possibly outbidding more efficient buyers. We present a first test of this opportunistic market-timing hypothesis that requires the bidder— not the target—to initiate the deal process. Our alternative hypothesis is that bidders pay with shares for efficiency reasons driven by target adverse selection and bidder cash constraints, which does not depend on who initiates the deal. Reduced form tests, structural model simulations, and estimated wealth effects all fail to support opportunistic market timing in bidder-initiated takeovers.