To what extent are stock-financed takeovers opportunistic in the European market?

Abstract: Opportunistic bidding is a phenomena where the bidder uses over-valued stock to acquire a target, which could threaten the efficiency in the market of corporate control. By using two hypotheses predicting the opposite outcomes, this thesis investigates whether or not opportunistic bidding behaviour exists in the European market of corporate control. A sample of 773 European bids was used and estimated with Tobit regressions. The size of the bidder was found to decrease the probability to use stock, while the deal size relative to the bidders total as-sets was found to increase the probability of using stock. No conclusion regarding opportunistic behaviour could be made based on the generated result.