Research On The M&A Premium On The State-owned Shares Of Lisited Companies By Foreign Capital

With China accessed into WTO and the development of Chinese capital market, thecase of the foreign capital merging shares of listed companies is gradually increasing.Since BLC (Beijing Lightbus Corp, Ltd) become the first case in1995, foreign investorsmerger and acquire the shares of Chinese listed companies have quietly passed through16years. In the past16years, all the cases of foreign industrial capital launched strategicM&A had been widely concerned by the practitioners and academicians. The researchershad never ceased arguing the relative issues concerning the foreign capital mergingstated-owned shares of listed companies. Some scholars regard that the foreign capitalpaid high premium on M&A, and Other scholars although other scholars agree to that thepremium level on M&A by foreign capital is seriously underestimated. These discussionsand debates not only indicated the complexity on the premium estimation’ of the foreigncapital merging stated-owned shares in theoretical and practical area, but also reflect theinadequate researchers on the M&A Premium by foreign capital in the academia.Based on the researching on the M&A premium on the state-owned shares of lisitedcompanies by foreign capital, this paper makes a deep analysis of the formationmechanism, influencing factors, estimating methods of the M&A premium on shares andconstructs estimating model of the M&A premium on shares. The results of study haveimportant theoretical value for enriching and developing theories and methods ofestimation of the M&A premium on shares. At the same time, the research can helpstate-owned shareholders to accuratly estimate the value of M&A on listed companiesand further enhance state-owned shareholders’ abilitiy of negotiating and bargining. Inaddtion, the study can help the state owned asset supervision and administrationdepartment to improve and standardize the M&A and transfer of the state-owned shares.The research has important practical significance for preventing the loss of state assets.This paper is in light of the following train of thought: raising the question�'analyzing the formation mechanism on M&A premium�'assessing the status of thepremium on the foreign capital merging stated-owned shares of listed companies �'analyzing the influence factors on M&A premium by foreign capital by positivemethod�'constructing the premium estimating model on the M&A by foreign capital�'Putting forward the policies and recommendations.This paper adopts the combination of qualitative and quantitative analysis methods,and normal and empirical analysis methods. Based on the theorical analysis for the sharesM&A premium, this paper studys the present status, influence factoes and estmatingmodel of the M&A premium on the state-owned shares of lisited companies by foreigncapital.This paper is divided into seven chapters, the main contents and results are asfollows:Chapter1is introduction. It introduces the research background, research value,research train of thought and methods, the main content and structure organization, aswell as innovation of this paper.Chapter2is literatures review. All the relative literatures of the M&A premium onshares fall into three categories: valuation of the intrinsic value of target campany’ share,the issues on the M&A premium on shares and the M&A premium on the state-ownedshares by foreign capital. On the basis of reviewing the representative literatures at homeand abroad, this chapter points out some problems in the present researches, whichestablishes the starting point and main issues of this paper.Chapter3is the theoretical analysis on the M&A premium on shares. First, thischapter analyzes the formation mechanism of the M&A premium on shares and dividesM&A premium into two parts: synergy premiun and real option premium; Second, thischapter divides the present estmating methods of M&A premium on shares intocomparable transactions method, value-added component method and experiencesanalysis method, as well as discusses the advangtage and disadvangtage of three methods;third, this chapter analyzes the influencing factors of the M&A premium on shares.Chapter4is the analysis of present situation about the M&A premium on thestate-owned shares of lisited companies by foreign capital. Based on reviewing thedevelopment process of foreign capital merges and acquires the state-owned shares oflisited companies, this chapter calculates the net assets premium rate, market pricepremium rate and intrinsic value premium rate, and takes the comparative analysis on the results of three types of premium rate. The research shows: it is common that the intrinsicvalue premium rate on the state-owned shares of lisited companies purchased by foreigncapital is lower.Chapter5is an empirical test on influencing factors of the M&A premium on thestate-owned shares of lisited companies by foreign capital. This chapter selects the casesof the shares of lisited companies purchased by foreign capital in2002-2009as sampleand adpots the positive study method to analyze the influencing factors of the M&Apremium. The research results confirm the intrinsic value of listed copmanies, the natureof propriertorial right, agency problem of state-owned shareholders are significentinflunencing factors.Chapter6is the process of constructing evaluation model of the M&A premium onthe state-owned shares of lisited companies by foreign capital. At first, this chapteradopts F-O model and B-S model to construct estmating model of the M&A premium byforeign capital. And then, this chapter detailedly introduces the application process of themodel by the case of Chongqing Brewery Co. Ltd, as well as evaluates the applicationeffects of the model. It indicates that the charateristics of this model are few forecastingparameter being used, simple calculating process and perfect estmating ability.Chapter7is the conclusions and suggestions. This chapter summarizes andelaborates the main conclusions of this paper, puts forward the correspondingsuggestions which are concerned with these issues of the state-owned shares of lisitedcompanies purchased by foreign capital, and puts forward the prospect of the futureresearch according to this paper’ limitations.The innovations are mainly embodied in the following aspects:(1) Based on the F-O model and the B-S model, this paper is in the light of thevalue-added component method to construct the evaluating model of the M&A premiumon the state-owned shares of lisited companies by foreign capital. This model evaluatesthe theoretical range of the M&A premium by foreign capital in accordance withestimating the value of the synergy and real option. This significant charateristics of thismodel are few forecasting parameter being used, simple calculating process and perfectestmating ability. This model has important value in theory and instructional significancein practice for researching the evaluating M&A premium. (2) This paper makes use of the modified F-O model to evaluate the intrinsic valuepremium rate on the state-owned shares purchased by foreign capital, and it is the firsttime in china that comprehensively evaluates the general level of the M&A premium onthe state-owned shares of lisited companies purchased by foreign capital in1995-2010.This research results not noly resolve the “premium paradox” about the foreign capitalmerges and aquires state-owned shares, but also provide the important references andindications to carry out the relative research.(3) Now, the research on the influencing factors of the M&A premium by foreigncapital is still on the theoretical perspective in our country, relative theoretical hypotheseshave yet to be positively proved. This paper adpots the positive study method and makesuse of the correlativity analysis and regression analysis to analyze the influencing factorsof the M&A premium on the state-owned shares of lisited companies by foreign capital.The research results confirm the intrinsic value of listed copmanies, the nature ofpropriertorial right and agency problem of state-owned shareholders are significentinflunencing factors.