Empirical Studies On Protection Of Small Stockholders' Benefits Under Tender Offer

There have been large amounts of systematic studies overseas in this field of protection of minor shareholders in target corporations during tender offers. Due to the lack of real tender offer events, there are very few empirical studies on the topic of tender offer in China while most of these studies emphasis mainly on the theories of protection of minor stockholders' benefits.The main target of the article is to study the protection of minor shareholders in target corporations during tender offers. The author picks up 25 corporations from Shenzhen Stock Exchange and Shanghai Stock Exchange during 2003-2006 as the samples and analyzes the protection effects of target minor stockholders' benefits by means of the tender offer price and accumulated abnormal gains of common stocks of target corporations. The findings indicate that, on the average, those target minor shareholders who will be forced to quit from the stock exchange may acquire premiums from tender offer while those small common stockholders in target corporations which will be kept in the stock exchange cannot acquire any premiums but loss in some extents. In addition, those un-exchanged common stockholders' benefits will be protected during the effective periods of tender offer. The article shows that the common stockholders will acquire negative abnormal gains and small stockholders' benefits will not be protected but be damaged in certain extents. The empirical test result is quite significant.