Study On The Legal Regulations Of Hostile Takeover In China

Hostile takeover means that where managers of target company are opposed to takeover action, bidder makes tender offers to shareholders of target company to buy their stocks and thus obtain the control of target company. As the stocks of modern public company may be transferred at liberty and the stocks are so dispersed that the ownership and control over company are separated, it provides opportunity for hostile takeover to occur. In microcosmic view, hostile takeover helps for enterprise to expand its scale, to improve its management efficiency and it also contributes to the problems of corporate governance. In macroscopical view, hostile takeover is helpful for economic development and improvement with the function of optimizing the utility of recourses. However, hostile takeover may cause great impact on stock market and interests of shareholders of target company are easily to be harmed during the process of stock trading. Therefore, to make the balance between ensuring the positive effect of hostile takeover to be achieved and protecting interests of shareholders and maintaining stability of stock trading is the focus of regulation on hostile takeover.The author suggests that regulations on hostile takeover in China should not be too strict by analyzing the basic problems of hostile takeover such as its concept, its character, its preconditions, its theoretical basis and its value to Chinese enterprises. The author also makes some comments on the status in quo of legislation in China, especially on "Securities Law" and "Company Law" which are revised recently by comparing to the legislations of hostile takeover overseas. In the last part of the thesis, the author tries to bring out some legal suggestions in the view of the detailed regulations of hostile takeover about the regulations of the "persons acting in concert", the principles of the modifying of the purchasing offer, the civil liability of the bidders who make false statements, the target company's managers' obligation of information disclosure and the anti-takeover actions of the target company.