Empirical Research On Chinese Listed Companies Management Buyout (mbo)

MBO as a leverage property right reform method has developed very fast in the domestic during the recent years because of the outstanding functions for the state-owned assets quitting the competitive marketing domain, clarifying the enterprise's property right, reducing the company executive's agency cost and shares stimulation. However, during the MBO practices, the MBO share acquisition price is dramatically lower than the book net asset per share, which triggers the suspicion and argument for the state-owned asset losses. What is more, three questions are raised regarding to domestic MBO practice: (1) Is the business performance improved for the enterprise post-MBO? (2) How about the relationship and characteristics among MBO, dividend payout policy, seasoned equity offering and share allotment? (3)Is the listed company's public share price significantly affected because of the MBO? This paper tries to give the answers around these three questions with the selected sample research.This paper includes five chapters:Chapter One: preface. Briefly introduce this paper's content.Chapter Two: the outline of management buyout. It includes the following components of the definition and features of MBO, the macroscopical MBO generation and facilitation factors, the MBO inherent characteristic advantages, MBO participants and the normal MBO procedures and steps in the MBO practice.Chapter Three: Domestic MBO listed company samples demonstration study. This is the key part including the following sections: the current status of domestic listed company MBO, the special implications for MBO, the MBO patterns introduction, the common MBO characteristics summarized from more than 50 MBO listed companies, the main differences between domestic MBO and western developed countries', choosing 7 MBO listed companies samples to conduct the detailed financial analyses, explore the relations and characteristics among MBO, dividend payout policy, seasoned equity offerings and share allotments, and study the relation between the public share price variation trend and MBO.Chapter Four: brief discussion regarding to the MBO state-owned asset losses and its pricing mode. The paper points out that considering the domestic MBO listed company's particularity in the share acquisition price, how to maximize to avoid the state-owned asset losses will highly depend on the relationship of understanding between the state-owned asset losses and the pricing. This chapter will try to raise the relevant recommendations to avoid and mitigate the state-owned asset losses during the domestic MBO. Chapter Five: the conclusion of the paper.This paper clearly points out: from the MBO listed companies samples, their business performances and stability can not meet the expectation which people are looking forward to. It means that the post-MBO business performance indicators do not have obviously improvement than pre-MBO. However, we need to understand that MBO has the special implications in domestic for state-owned assets quitting and property right transparentized. The sample demonstration study shows that domestic MBO listed companies have the high debt ratio leverage features, and the debt ratio is much higher than pre-MBO's. The liquidity ratio presents the decreasing trend, and the equity ratio is much lower than pre-MBO's. The samples also demonstrate the MBO listed companies have the high dividend payout ratio in the certain years of fore and after MBO with the corresponding smooth cash flows and are apt to getting cash in the dividend payout policy in the recent certain years after MBO. There are no significant influences between the public share price and the listed companies' MBO.