| Preventative anti-takeover measures are defensive measures taken by listed companies for potential tender offers to prevent uncertain hostile takeovers, including measures like poison pills, charter amendments, golden parachutes, ect. As an important way to defend corporate takeovers, it has been fully developed toward perfection in the board-centered America, and a complete judicial review system for its legality has been established by a series of cases. The affection of the fifth overwhehning worldwide merger and acquisition tide, the completion of the national reforming of listed companies share structures, as well as the adoption of the new Corporate Law and Securities Law, jointly foresee that the takeover and anti-takeover activities of our listed companies are faced with a coming profound reform. After the implementation of the new Listed Companies Takeover Management Act on September 1St, 2006, anti-takeover measures are still mainly regulated by Article 33, according to which, how to adopt and regulate preventative anti-takeover measures by boards of listed companies before tender offer still remains an unsolved problem. Considering such a problem, based on the definition of anti-takeover regulating, as well as the Chinese market environment and regulations, the paper discusses the adoption of preventative anti-takeover measures in China in both terms of objective legality and subjective legality. It consists of two sections, the introduction and the text. The former section includes why choose the topic and introductions to major reference books and papers. The structure of the latter section is as ffollows:Chapter I includes all definitions related to anti-takeover, such as acquisition, tender offer, anti-takeover measures, anti-takeover regulating. Definition for preventative anti-takeover measures determines the discussing scope for the paper, and both the contents and layers of its definition lay the foundation for the logical thinking path.Chapter II is a brief introduction to major types of preventative anti-takeover measures, among which the concentrated three basic forms are Poison Pill, Charter Amendments and Golden Parachute. There are further specific measures within each form. For example, poison pills can be classified into preferred stock plans, flip-over poison pills, flip-in poison pills, dead hand poison pills, and so on, and chapter amendments include fair price provisions, staggered board, super majority provisions, super voting stocks, and so on.Chapterâ…¢is value analysis for anti-takeover measures. An objective judgment of the value of preventative anti-takeover measures is also the basis to decide its legality. In this chapter, its major positive and negative values have been listed and analyzed referring to the first legalized case of poison pill in the America.Chapter IV is respective discussions for objective legality of different preventative anti-takeover measures. Objective legality mainly refers to whether they could be adopted based on a combination of legal stipulations, structures, principles and features of the measures themselves. Those measures that violate compulsory regulations and principles shall be prohibited, no matter they are decided to adopt by the stockholders' conference or the board; and those measures decided by the board shall not break definite stipulations on the powers of the board.Chapter V is the principle structure of judicial review for subjective legality. In this chapter, four major principles, main purposes principle, strict business judgment rule, protecting minority shareholders principle and inverted burden of proof principle, are concluded on the basis of its value analysis in chapter III, referring to the complete American judicial review system.The last chapter is the epilogue of this paper, in which a summary of this paper is concluded.
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