A Study On The Performance Of Chinese Tender Offer

Tend offer is a typical merger style in mature stock market, which is also the core field that the security law adjusts. Its main trait is that the offer is designed to all of the stock-holders, in order to absolutely control the targeted company. It also represents the rule of open, company-owner's decision in the merging process. So it is recognized as the most market-oriented merge style. In the development of China security market, a great difference between China and other market is that two different kind of equity exist in Shanghai and Shenzhen stock exchange markets. These two different equities are different in that whether they can exchange on secondary market. Equity that can not be exchanged on secondary market takes up major ratio. Because of the special condition of our country, Tender offer never happened in mainland though many merger and acquisition happened in last twenty years. Even the first tender offer happened in mainland" Nan Steel merger event", is just a meaningless tender offer. With the equity division reform further development, non-tradable share will be exchanged on secondary market, the division between tradable and non-tradable shares will eliminate, which will result in the foundation of the market-driven system. The behavior of listed companies' Tender Offer, therefore, will experience the profound transform. So we can forecast that tender offer will replace negotiated merger in the "full circulation" time.Based on the related theories of both China and Western countries, the paper introduces the practical condition of China and the experience of foreign merge and acquisition market, applying the way of demonstration and criterion analysis, comparing analysis and the quantitative analysis to. The paper focus on the contrast between tender offer and negotiation merger in the fields of minority stock-holder protection and the operating efficient of target company after being merged.The paper mainly includes the following topics: How to define the concept of Tender Offer in China? The difference between mature capital markets and mainland capital markets in tender offer? the performance of Chinese tender offer in the fields of stock-holder' s interest protection and the performance of targeted listed companies after the acquisition.Firstly, the paper is based on the new background of equity reform from 2005, closely relating to the capital market development, thus this paper has practical meanings. Equity division reform will eliminate the difference between tradable share and non-tradable share, which solves the toughest problem the tender offer faces. This paper is a further research on China tender offer in this historical period.Secondly, the typical trait of this paper is the use of contrast-analysis method to explain the defects of negotiation merger and the advantages of tender offer. From the view points of minority stock-holders protection and targeted company's operation after being merged, the research results show that tender offer promotes the operation of target company and its minority stock-holders' interest is well protected.Lastly, the paper make a conclusion for in the last part, pointing out that, China's tender offer is different from international tender offer, however, by using comparing analysis and the quantitative analysis, it marvelous promotes the operation of target company and protect its minority stock-holders' interest. Two pieces of suggestions are made in the end to narrow the gap between China and mature capital markets countries.