MBO Pricing Analysis Of The Listed Companies In Mainland Stock Market

Till now, the pricing of most State Owned Enterprises' Management Buy-out in China is taking the net assets as reference, so is the pricing of the listed companies. While in west countries, the DCF (Discount of cash flow) model is widely used in MBO practice. The model uses a comprehensive and simple way to take most factors that affects the company value into consideration. By doing in this way, both the buyer and seller will know the real value of the company more clearly, and identify the key factors of how to improve the operation efficiency.This report takes the 10 listed companies in domestic stock market that implemented MBO during 2000 to 2002 as samples. By using DCF model to evaluate the value of the samples, the report provides a reference by comparing the real transferred price and the evaluated price, which could help the readers to realize the undervalue of these transferred companies, and to understand the difference pricing ways more deeply. This report also explains that only taking the reasonable pricing model is not enough in the MBO practice of China. To further guarantee the transaction's fairness, it is necessary to introduce the market way. Moreover, the contribution of management team is even a more important factor to be considered. The reasonable pricing mechanism that fits the practice of MBO in China can form only by taking all above factors into consideration.