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Legal Issues, Regulation Of The Tender Offer

Posted on:2002-07-13Degree:DoctorType:Dissertation
Country:ChinaCandidate:J XiangFull Text:PDF
GTID:1116360092971018Subject:International law
Abstract/Summary:PDF Full Text Request
In the market for corporate control, tender offer, being a method of coercive public acquisition, may cause sharp fluctuations in the market prices of the shares of the target corporation. In the process of a tender offer, the target shareholders, especially minority shareholders, are situated in disadvantageous positions. Lacking transaction information and negotiation power, their rights and interests are liable to be infringed by both the bidders and the board of directors of the target corporation. Therefore, related legislation is urgently needed to regulate tender offers. A majority of countries strictly regulate tender offers via legislation, administration and judiciary means, trying to provide tender offers with a wider range of objects, adequate information, a legally fixed minimum period, a standardized procedure and a reduction in its coercion. In view of the achievements the U.S. has made in the tender offer regulation, this dissertation aims to study the tender offer regulating regime in the U.S. Complicated as it might be, the dissertation mainly studies the regulation of the practices of the bidder and the board of directors of the target corporation, aiming at protecting the target shareholders, especially minority shareholders, and bringing forward suggestions for the perfection of the legal system of the tender offer in China.Besides the preface and the conclusion, the dissertation is divided into four chapters. Chapter /, based on the legislative and judiciary practices in the U.S., discusses the definition of the tender offer, which in turn determines the regulating scope of the related law. Despite that the Williams Act strictly regulates tender offers, it is in no way limited to tender offers only. Due to the absence of the definition of the tender offer in the Williams Act, bidders sometimes evade the stipulations set in the Williams Act by designing other acquisition forms, which sometimes put the shareholders of the target corporation into the dilemma that the Williams Act intended to avoid. Under such circumstances, the Securities and Exchange Commission and the courts in the U.S. raised some criteria in defining the tender offer, setting certain privately negotiated purchases and public market purchases as unconventional tender offers, which consequently broadened the scope of legalregulation, and in essence, enlarged the scope of bidders subject to legal regulation.Chapter II mainly deals with the information disclosure system of the tender offer in the U.S. and its substantive regulation. First, on the basis of the judiciary practices and from the angle of both the bidder and the target corporation, the dissertation investigates the information disclosure framework, which went into effect this millennium, emphasizes the equal treatment between the exchange tender offer and the cash tender offer, reveals the trend of information disclosure: simplification and integration. Second, the dissertation explores materiality determination in the process of information disclosure for tender offers, and, as a result of which, demonstrates major evolutions in the standard of materiality in the U.S. judiciary practices in running its information disclosure system; it especially studies the issue concerning the materiality of the "line-item provisions" in the process of the tender offer. Third, the dissertation discusses the issue of insider trading in the process of the tender offer, it studies the development of the liability theories on prohibiting insider trading by the U.S. courts, profoundly analyzes the benefits of rule 14e-3 in prohibiting insider trading, it also compares the advantages and disadvantages between rule 14e-3 and the misappropriation theory in prohibiting insider trading. Finally, because the substantive regulation of the tender offer is indispensable for the sound decision-making of the shareholders, the dissertation analyzes the contents and effects of the substantive regulation, and concludes that the essence of the regulation is limiting the trading rights o...
Keywords/Search Tags:Tender Offers in the U.S., Legal System, Legislative Suggestions for China
PDF Full Text Request
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