The Research On The Value Of Corporate Control Of Listed Companies In China

As the impact of the worldwide M&A(merger & acquisition) wave, the market control of listed companies in China will take a revolutionary change, the transfer of corporate control in external market will gradually reduce the role of the government and change to specialized and market-orient M&A method. The transfer of corporate control which is the fundamental reasons of transformation represents the value of corporate control and provides an effective research method for it. Therefore, research and analyze the value of corporate control as well as relative problems, it will be significant to explain the mechanism of corporate control transfer, optimize corporate management structure and performance, solve the rated problem of corporate control trade, optimal allocate market resources, and especially to the healthy development of corporate control market in full-circulation time.The paper combines the theoretic and empirical method to explore the origin of the corporate control value existence, corporate control transfer and market, the measurement of control return and the share merger reform. The corporate control value of domestic listed company is the research object of this paper. The private return of corporate control which indicates the value of corporate control is also an important and difficult problem for the research of corporate control value.The separation of cash flow control and ultimate control is a significant factor for the bringing of corporate control value, and the extent of the separation reflects the cost of corportate control acquiration. Under the enterprise theory and corporate management theory, this paper analyses the theoretical root of generation of corporate control value and uses the revise logistic model to explore the condition of existence and subsistence of the value of corporate control in theory. The model indicates that: (1) in a certain period, if the private return being invaded properly and the growth rate lower than the public return, the control has stable return, whereas, if over-invasion, the return of control will converge to zero; (2) the benefit invasion enhances the value of corporate control, and the benefit tunneling decreases the value of corporate control. When the invasion reach to a certain level, the value of corporate control will become zero,or when the controlling shareholder is invaded by listed company in a certain extent, the value of corporate control will be zero either. (3) when the control has stable value, the growth of the public return promotes invasion, the value of corporate control will increase; the more public return, the more convenient of invasion, and also the higher value of corporate control. If the shareholder has small percentage of the shares, the invasion is deeper. when the cost of acquiring private return increase, the value of corporate control decrease. Based on the data from domestic listed companies, the three years's average RoE, the proportion of controlling shares and the ratio of cash control to ultimate control before the transfer of corporate control are used to measure the value of transfer of corporate control. The empirical results show that: the higher proportion of shareholder, the major shareholder will be more active to improve the public return. The heavier of seperation of cash flow control between corporate control, the larger of private return. Since most of domestic listed companyies are single-layer control, and major shareholders always have high proportion of shares, the higher of ROE, the lower of private return from corporate control, and the corporate control is combined of pubilc return and private reutrn, so the theoretical derivation accord with the demonstration.This paper constructs a signal game model, and exploses the transfer behavior of both parties in the shares transfer theoretically. the results are showed below: (1)if the recipient estimates the probability of high-quality company sends high-quality signal over a certain point, whatever the company is high-quality or low-quality will act transformation, then the two parties achieve the first equilibrium. If the recipient estimates the probability of low-quality company sends lower-quality signal below a certain point, whatever the company is high-quality or lower quality the recipient will accept the transfer to achieve the second equilibrium. (2) we analyze the different characters of shareholders by combining the character of equity change or non-transfer of corporate control ,the results present that: when the character of equity change in the transfer of corporate control, if the shares transfer from state-owned shares to private companies, the transfer price is always lower, it may lead to loss of state-owned capital. If the shares transfer from legal-person shares to legal-person shares, the permium is lower compared to the premiun between sated-owned shares, taking the market-orient transfer between legal-person and legal-person as standard, then the true price of the company is overestimated by transferring between stated-owned and stated-owned . the former situation which reduces the cost of acquring corporate control for the private company is analogous to the second equilibrium, and the later situation which increase the cost of acquring corporate control for state-owned capital is analogous to the first equilibrium.The measurement methods of the value of corporate control are summarized and epurated, the measurement indexes are restructured and multiple regression analysis is used on excess corportate control in this article. Through analyzing the factors that effect the value of corporate control, it showes that the main reasons are the earning ability and the change of company shares in the transfer. Howerver, the financial statement, the percentage of shareholder change or not during the transfer, cash flow, scale, transfer year, the super control rate are all less significant on reflect the value of corporate control.Considering the influences of the share merger reform, in terms of the research of compensate equilibrium, the reform pattern may not satisfy all the tradable shareholder with the proper compensation, the benefits of middle and minor shareholders are not protected in some companies, it shows evidence of the value of corporate control or private return of corporate control. Based on the statistical research on the return level of the stock, the finance indicators and the time limit to sale during the stock-reform reflects that: investors have good expectations, the private benefit of control right should be restricted, and the controlling stockholder would not weaken its control right because of its value.this article has several aspects on innovative: it firstly take the super cash right , namely the separate extent between cash right and control as a index which effects the value of corporate control; it firstly discusses the existence and subsistence of value of corporate control in theory, and analyzes the private and public value of the control ad the benefits of the control shareholder's behavior. It uses signal game model to analyze the strategy of parties in transfer of corporate control in theory for the first time, it is helpful to monitor the behaviors during transfer of corporate control. This paper also considers the extent of seperation between cash flow control and corporate control as an index which influences the value of corporate control. Furthermore, the paper studies the value of corporate control under the background of the share merger reform initially.