An Empirical Study On The Performance Of A-share Listed Companies' Tender Offer In China

The M&A activitics of capital market of China have become more and more fierce recently. The relevant Chinese experts are studying the performance of M&A. However, most of studies have same shortcoming : First, compare performance of after and before of M&A's time is very short , often, only one to three years, Few samples let hard to do statistic significantly test for analyze results. Second, most paper's research method localization that use accounting data or stock price calculate cumulative abnormal return, not use the operating cash flow return before income tax and interest expense that the management can't manipulate to weight whether or not the performance is up after acquisition.The author samples 37 the A-stock listed companies of Shanghai and Shenzhen which conducted tender offer in 2003. Under Chinese unique background, use the industry-adjusted operating cash flow return weight the performance whether or not improve after acquisition, and to pose some advices of how to developing Chinese listed company's acquisition.Three conclusions can be drawn from this parer: First, before acquisition , The target company's performance was poorer than the listed company of the same industry, because there are very scarce of listed company in China, and the local government or industry superintend intervene the acquisition. Second, after acquisition, the target company get 9.9% of abnormal operating cash flow return at the 7% level, using a two-tailed test. Three, the regression indicate that business overlap don't affect performance that after acquisition.