Empirical Research On M&A Targeting Firm's Characteristics

Along with deepening of our stock market's reform and fast development of capital market, especially since the dual-rights reform, the merger and acquisition's environment of listed company has had a quite big change. To utilize M&A better which is a good tool for company strategic conformity and resources optimization disposition, we are urgently needed to recognize characteristics of targeting firms and establish an effective forecast model with comprehensive economic analysis method. It is of vital significance for M&A side, targeting firms and investors to distinguish the potential targeting firm by analyzing characteristics of targeting firms.On the basis of the review of previous empirical results, the article carries on more systematic research and discussion on the theories of M&A's Motives in order to find corresponding characteristics. Considering the advancement of the dual-rights reform, the article proposes the assumptions on the targeting firm's characteristics.In empirical study part, one hundred listed companies of A market are selected as research sample. In view of corresponding supposition, an indicator system is constructed including financial characteristic, stockholder's rights structure, capital stock situation and so on. It is found that comparing with non-target companies target companies have low profit, insufficient growth ability, limited financial resources, underestimated company value, dispersive stockholder's rights, high liquidity of stockholder's rights and good cash status. Different with the former research, the article found that small size is not chief feature of targeting firms any more. Through factor analysis and correlation analysis, thirteen variables were filtrated, with which the article established the targeting firm forecast model using the Logistic regression analysis method. Finally, property profit margin, account receivable cycling rate, the total assets rate of increment, the state-owned shares proportion entered the model, showing company with lower profit ability, stronger cash cow function, worse growth potential, higher stockholder's rights fluidity are easier to become the M&A's targeting firm. The forecast model passes Hosmer-Lemeshow goodness of fit examination. Its accuracy of prediction arrives at 76% which achieve the forecast purpose on the whole.