The Information Disclosure System Of Tender Offer

The Information Disclosure System of Tender Offer Information Disclosure System and Regulation about Tender Offer, both are vital parts of the regulation system of the security market. "Disclosure System" is considered as the cornerstone of the whole Regulation System. It plays an unalternative role in balancing the rights and abligations between investors and operators, in dealing the problem of "Dissymmetry of information" in the stock market as well. By the way of strengthening legislation, compelling the issuers, managers and takeovers as parties at advantage of information, to disclose related information according to the law, this system in one hand protects the interests of the investors, in the other hand helps to maintain the confidence of the market and make it worked smoothly. "Regulations about Tender Offer" is considered as the best system reflecting the energy and creativity of the stock market. This system makes it possible for the bidders to control the target company, totally or partly , by the way of sending offers to all shareholders and obtaining certain shares of it. Its initial purpose is to optimize the resources and enhance the operating efficiency through merger and acquisition. In the "common law" countries, tender offer takes place frequently, while few happens in the "continental law" countries. As a "crossing point" of the two systems, the importance of "The Information Disclosure System of Tender Offer" speaks for itself. Before thissystem is established, some kinds of illegal behaviors happened frequently in the processes of tender offer, such as conjunction dealing, act in concert, insider dealing and misrepresentation. In order to prevent this kinds of behaviors, different country strengthens its legislation and tightens the disclosure obligations of the bidders. These methods make the activities of merger and acquisition under the "sunlight" and prevent "black-box manipulations" effectively. Comparing the regulations of different countries, I found some differences and arguments. This article tried to discuss some of them and find some experience and instruction for Chinese legislators. The article may be divided into four parts: The first part includes the Foreword and Section One. This part mainly sets forth related concepts and philosophies which will form the article's theoretical foundation. The Foreword introduces the position and function of the two systems and points out the difficulties and keystones inside. Section One briefly introduces the history of the two systems and defines the concept of "tender offer".Part â…¡ canvasses the disclosure obligations in each phases of the process. Section Two is about the "Early Warning Disclosure System". In the security regulations of different countries, there is a "critical line" which requires a shareholder to disclose related information when he obtains a certain number of shares. Some country selected the "5%"criterion, while some selected "10%". Section Three talks about the disclosure obligations during the course of thenegotiation. This kind of negotiation always deals with some important matters of the merger or acquisition. So the parties engaged should carry some kinds of disclosure obligations.Section Four is about the transaction of tender offer. When the shareholder controls enough shares to meet the requirement of related regulation, he is enforced to submit the transaction of tender offer and disclose particular information, such as the purpose of the acquisition, the plan of reconstruction, the source of capital.Section Five discusses the disclosure obligations of the directorate in the case of tender offer. Always the directorate gains advantage in accessing basic information. And its recommendation about the offer is always regarded quite important by the general investors. So the recommendation of the directorate should be true, just and complete. Part â…¢ canvasses the civil liability of misrepresentation. There are three selections in esta...