On The Legal Perfection Of The System Of Mandatory Tender Offer In Our Country

Mandatory tender offer, as one quite characteristic system of the acquisition of the listed companies, has developed in England since the 1960s.It has been adopted by a lot of countries and areas all over the world, but fails to be a system which is universally adopted by all the nations. Provisional Regulation on the Administration of Share Issuance and Trading which was promulgated by the State Council on April, 1993 stipulates the system of mandatory tender offer at the first time, however, in the period of carrying out Provisional Regulation on the Administration of Share Issuance and Trading, our security market has not taken place of one mandatory tender offer in the true sense until the Securities Law of the People's Republic of China which was promulgated and implemented in 1998 as well as the Measures for the Administration of the Takeover of Listed Company which was promulgated and implemented in 2002 reduce the bottom line of the price of takeover offer greatly and implement the double-track system to the circulating shares and non- circulating shares, then takeover offer as a kind of share acquisition form turns active. The case of the acquisition of Nanjing Iron and Steel Co. Ltd. is the first example of the mandatory tender offer case, but its concrete implementation situation is not satisfying or the core value of mandatory tender offer system—granting the withdrawal opportunity to the medium and small investors of the target companies on the basis of obtaining the control rights of premium—fails to manifest in this case.This thesis is at the perspective of the case of the acquisition of Nanjing Iron and Steel Co. Ltd., under the context of economic law, interpreting the mandatory tender offer system and making corresponding proposals for amendment, looking forward to offering reference to legislative and judicial practice.This thesis can be divided into four parts:The first part introduces the case of the acquisition of Nanjing Iron and Steel Co. Ltd. in detail. Through this case, it shows that the mandatory bid system was applied in this case at the first time, but it is a mere formality basically. Its core value fails to realize adequately.The second part presents four legal questions which are extended by the case. Firstly, is the nature of the investment behavior of FuXingxi belongs to the takeover of the listed company or not? Secondly, is this takeover belonging to the voluntary tender offer or mandatory tender offer? Thirdly, in view of the poor effectiveness of the mandatory tender offer, is it necessary for our country to stipulate the mandatory tender offer system? Fourthly, in the case ,what are the reasons for the poor effectiveness of the mandatory tender offer system?The third part conducts legal analysis aiming at these four questions and puts forward the legislative suggestions for improving the system of mandatory tender offer accordingly. This part is the main part of this thesis which can be divided into four parts:1.With regard to the definition of the concept of takeover of listed company, it shows that the nature of investment behavior of FuXingxi belongs to the takeover of listed company. First of all, it points out that the takeover of listed company in this thesis is the takeover which takes the listed company as the target. Then, the defining of the concept of the takeover of listed company which is aiming at the field of the theory is classified summarily. The specific provisions regarding the takeover of listed company in our securities laws and regulations are introduced. Both the jurisprudence studies and the substantive law point out that the subjective factors of the acquirers are no longer emphasized in the judgment of the acquisition of listed company. Instead, only if when it reaches the 5% of the critical point shall they fulfill the obligation to disclose the information in accordance with the relevant regulations of the acquisition of listed company; when it reaches the 30% of the trigger point of the acquisition of mandatory bid, the mandatory bid regulations shall be applied. At last, it points out that the nature of investment behavior of FuXingxi in the case of the acquisition of Nanjing Iron and Steel Co. Ltd. in detail belongs to the indirect acquisition of the acquisition of listed company.2.The nature of the investment behavior of FuXingxi is mandatory tender offer. Firstly, the concept and legislative value of tender offer are introduced. Secondly, according to that whether the offeror issues the offer voluntarily or not, tender offer can be divided into voluntary tender offer and mandatory tender offer which are both related and differential. Mandatory tender offer is one kind of the tender offer. The provisions regarding the system of mandatory tender offer in our securities laws and regulations are introduced. From the current legislation, which is about the tender offer as one acquisition mode of listed company in our country, our country applies the institutional system which combines partial tender offer with mandatory tender offer. At last, it points out that the nature of the behavior of general offer which is issued jointly by the Nangang belongs to mandatory tender offer.3.The theoretical interpretation about the system of mandatory tender offer. Firstly, it introduces a series of cases of mandatory tender offer which are occurred in our securities market, illustrating the poor effectiveness of the system of the mandatory tender offer in our country. Secondly, the origin,legislative value of the system of mandatory tender offer and the doubts of certain scholars are reviewed briefly. Under the context of economic law, in accordance with "Needed State Intervention", as the core concept of economic law, the system of mandatory tender offer is interpreted, pointing out that this system is the intervention methods in the legal sense in fact. Due to a lot of the drawbacks of the securities market in our country, this system is reasonable and necessary in our country currently. Finally, in the case of the acquisition of Nanjing Iron and Steel Co. Ltd., although the system of mandatory fails to exert its core value, it provides the medium and small shareholders of the target company with the security system of rights and interests at least in the form of sense.4. The paper talks about the reasons for poor results of the System of mandatory tender offer from the macro-and micro-analysis of the two angles. First of all, from a macro point of view, they are the pursuit of its value ,the overall environmental laws and regulations as well as ancillary issues, Secondly, from the microscopic point of view, the generous offer price provisions issued by the acquirer makes an offer price is too low, the shares do not reflect the value of the target company and therefore, the offer will not be accepted by the medium and small investors, resulting in the poor effectiveness of the system.The fourth part is about the legislative suggestions for the further revision for the system of mandatory tender offer. Affirming the value of the system of mandatory tender offer at the same time, aiming at the revision for the system of mandatory tender offer in the 2006 Securities Law and Measures for the Administration of the Takeover of Listed Company, I put forward the suggestions for revision and perfection: firstly, the acquirer who assumes the obligation of mandatory tender offer can only issue the general offer other than partial offer, the coexistence of general offer and partial offer, which are stipulated in our country, fails to adequately protect the interests of the small and middle shareholders of the target company, advising to annul the partial offer which belongs to the system of mandatory tender offer. secondly, the regulations of the offer price are the key elements which determine whether the system of mandatory tender offer can exert its core value or not, but the regulations of the price of the newly amended system of mandatory system are more flexible. It is easy for the acquirer to circumvent the system, so it is recommended that the regulations of the price should be revised. Thirdly, the exemption of offer can avoid the rigidity of mandatory tender offer system in some senses, so that the acquisition which is friendly and can create greater wealth will not be hindered because of this system. However, due to the application of our mandatory tender offer system exists the formality essentially, so that the requirements of the exemption of offer shall be strict. Meanwhile, it is proposed to revise the discrimination against the private enterprises and the tilt of companies of poor performances, strengthening ex post monitoring, in order to improve the sound development of the acquisition of the listed companies in our country.