The Research On The Legislations And Practice Of Mandatory Takeover Bid In China

Broadly speaking, a"takeover"takes place when one corporation acquires the actual control of another corporation, which is limited to listed corporation in this dissertation."Takeover"is the product of the development of market economy. Since the late 20's century, there has been one wave of takeovers after another all over the world. But the takeover of Chinese listed corporation is just underway.There can be three operating modes of takeovers, and the"takeover bid"(or tender offer") one maybe the most normative. However, the operation of the takeover bid (or tender offer) can be very different depending on whether you introduce the"mandatory takeover bid"(or"mandatory offer") system or not. Substantively,"mandatory takeover bids"(or"mandatory offers") are the takeover bids (or tender offers) made by acquirers involuntarily when certain conditions are satisfied, because of the requirements of mandatory rules. China has been adopting the system in its securities laws so far. However, the system had been developing always with drastic disputes and criticism in the range of the world. In the dissertation, I try to analyze the legislations on the system in the world, the purposes and values of the system itself, and the situation of its establishing, developing and actually operating in China. Then I'd like to give my advice on whether or not to adopt the system any more in the future in China. Besides the preface and the conclusion, this dissertation could be divided into six parts.Part 1 is the summary of the system of"mandatory takeover bids"(or "mandatory offers"). After introducing the definitions and relationships of takeover, takeover bid(or tender offer), and mandatory takeover bid(or mandatory offer), I will point out the function designed for the system, that is, to realize the principle of protecting minority shareholders'interests—as one of the substantive protection measures for minority shareholders.Part 2 is the comparative research of the system in different countries and districts. It is important to bear in mind that it's not a general tradition to adopt the system in the world wide. U.K. is the headstream of the system, Hong Kong and a few other countries and districts learned from U.K. As the compromise of the long time disputes, the EC eventually wrote the system in its Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids. However, U.S. has never adopted the system, but through other alternative measures, the country achieves the object of minority shareholders'protection, too.Part 3 is the thorough analysis of the values of the system. Generally speaking, the value is to protect the minority shareholders'interests when the listed corporations they holding shares is faced with a takeover. It can be decomposed to three aspects, that is, mandatory request to share the controlling premium, the escaping opportunity for minority shareholders, and the special protection of minority shareholders in"two-tier takeover bids". But all the three aspects are very controversial.Part 4 and part 5 fixate on the legislations and practice of takeovers in China. According to the different market basis of the takeover system and the popular viewpoint, I divide the Chinese capital market into two eras. First of all, I will analyze the environment and situation of the circulation of the "mandatory takeover bids"(or"mandatory offers") system and the causes of formation in the first era. Then, I will predict that the embarrassed status of the system is not going to change, even if the legal and economic environments have both changed in the future second era.Part 6 doubts the necessity of the adoption of the system in China, since it has so many problems, no matter in comparative law, jurisprudence or the practice in China. And then, presents a hypothesis that if other minority shareholders'protecting measures can replace the system and the costs are limited in an acceptable scope, it seems that there is no need for the system to exist in China any more. Then tries to prove it and finally comes to the conclusion.