| Since the first takeover bid case of Chinese listed companies,Nan Steel merger event,occurred in 2003,the takeover bid market slowly developed.According to Shanghai Stock Exchange and Shenzhen Stock Exchange,as of March 31,2010,the number of takeover bid case of Chinese listed companies was only 34,while there were hundreds of cases of exemption from takeover bid of Chinese listed companies since 2003, which was far more than number of takeover bid case of listed companies. In this context,the minority shareholders protection of target companies will be researched deeply in this paper.Are the causes for exemption from takeover bid reasonable? In the takeover bid cases that have occurred,whether the takeover bid price was good for minority shareholders of target companies? If not,they would refuse the bid,then whether they can get certain compensation from the secondary stock market? Namely,is the takeover bid announcement effect in the stock market significantly positive? These questions will be answered one by one in this paper.From the finance perspective, based on a large number of takeover bid and takeover bid exemption cases and combined with the empirical method of events study, there is in-depth analysis of takeover bid of listed companies and the minority shareholders protection in China in this article.Refer to the results,appropriate recommendations are provided which has relatively strong theoretical and practical significance.This paper firstly described the theory basis of takeover bid from five aspects:the definition of takeover bid,the classification of takeover bid, takeover bid system,theory of control right market, efficient market theory. Secondly analyzed the major problems in minority shareholders protection of target companies:excessive use of exemption from takeover bid, zero presale phenomenon is common because takeover bid price is below the secondary stock market price and the takeover bid announcement effect is difficult to be significantly positive.Thirdly three important conclusions were drawn.The first one is that in Chinese stock acquisition market, takeover bid exemption was used excessively as a tool for the protection of state-owned enterprises,that eroded the legal rights of minority shareholders.The second one is that zero presale phenomenon caused by low takeover bid price that is below the secondary stock market price of the target companies is very common in China,therefore minority shareholders get no substantive protection,not only the circulation premium, not to mention the control rights premium.The third one is that the minority shareholders of target companies can hardly get certain compensation from the secondary stock market,namely,the takeover bid announcement effect is not significantly positive.Finally,based on these important findings,this paper put forward the following two suggestions about how to strengthen the protection of minority shareholders of target companies.One is to improve takeover bid exemption system.The other is to establish the principle of the best price in the legislation on takeover bid. |
