Legal Regulation Of Hostile Takeover And Anti-Takeover

The characteristics of stocks in modern stock company include free transference, separated shares and rights and apart ownership and controlling right. All these have laid the preconditions for hostile takeover. Microcosmically speaking, hostile takeover could optimize the combination of enterprises; promote the efficiency of management, thus playing an active role for corporate governance. Macroscopically speaking, hostile takeover could collaborate industry structure and optimize the allocation of social resources. Meanwhile, predatory hostile takeover could have a strong impact on security markets, and the interests of small shareholders in the target company could be injured during the process of stock exchanging. What accompanyingly occurred is anti-takeover which meant to defend hostile takeover. This behavior is conducted by controlling shareholders or board of directors. It is more likely for controlling shareholders to utilize as a weight to lift the price of purchasing, consolidate their statue and enlarge their profits.Our country is constructing and improving the capital market, which including bettering the supervise measures of open tender and takeover, vigorously solving various people's livelihood problems, striving to complete the historical task of constructing"harmonious society". In this context, it's especially important and urgent to protect the interests of small shareholders who are in disadvantage in hostile takeover and anti-takeover.Hence, it allows of no delay for our legislators to face the problems of what kind of attitudes should they take, how to make laws to fully demonstrate the active role of takeover to allocate resources, at the same time to eliminate or diminish the negative impact from hostile takeover and anti-takeover.This dissertation aims to convince our legislators to take appropriately encouraging attitude towards hostile takeover and to strengthen its standardization, to properly restrict anti-takeover by stating the fundamental issues of hostile takeover and anti-takeover, by studying on preconditions and theoretical gist of them and by linking correspondent cases and the state conditions of our country to show the impact of takeover contest on small shareholders. By means of comparing and analyzing overseas related legislation, this paper comments on the current state of legal regulations of hostile takeover and anti-takeover in our country. From the perspective of regulating buyer and target company in hostile takeover, this paper proposes related legislative suggestions on information disclosure of the buyer, fiduciary duties on the directors in target company and anti-takeover regulations, all to make the legislations on takeover to improve constantly on the basis of current law and regulations.The"takeover"mentioned in this paper refers to open tender and takeover. The"small shareholders"mentioned in this paper refers to those shareholders who own less than 5% shares of a listed company, and lose control of the business management in his invested company.