As an important reorganizational mechanism, management buy-outs has boomed in China's capital market. However, the transitional and developmental characteristics make China's MBO difficult to advance in both reality and theory. A heated debate has arisen among the authors regarding the reasonability of transfer pricing, transparency of financing, and acceptability of MBO on company's performance. But upon to now, systemic research based on detailed cases and data in the field is urgently needed. This paper is intended to provide an explorative study on MBO, employing comparative analysis and case study. My research shows: The price of transferred shares is relatively low, while has its reasonability; the MBO financing result in high financial risk; present evidence does not support the view that MBO has a negative effect on the companies' performance; and on average the MBO companies do not have over-dividend behaviors. Finally, I provide relative remedies.
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