A Study On Legal Issues Of Listed Companies' Preventive Anti-takeover Strategies

Stork market in China has entered the air of full-circulation since the completion of the shareholder structure reform. With the change of the acquisition values as well as the diversification of the acquisition types, anti-takeover as a strategy which target company resists even defeats acquisitions will play an important role in the war of control power. Preventive anti-takeover strategy means target company takes measures to prevent possible acquisitions before hostile takeover. Listed companies especially those whose ownership structure are more disperse or market capitalisation is undervalued will be obliged to think over which preventive anti-takeover measures can deter the hostile takeover effectively.The study on preventive anti-takeover strategies of listed companies can regulate their internal governance structure, even more it makes their defense measures under the legal regulation. But in the current situation it is short of reasonable solutions that compatible, rigorous and suitable for China's national conditions no matter on studies of theoretical research or legal practice of listed companies. It is necessary to combine preventive anti-takeover strategies with anti-takeover practices of listed companies and evaluate the feasibility of widely used anti-takeover strategies in the existing legal frame through analyzing the typical cases. It will contribute to study preventive anti-takeover systemically and provide realistic basis for the perfection of legislative on the preventive anti-takeover strategies.The capital markets in American and England are both developed, but the specific system and culture background produces the different legislation modes of anti-takeover. But these two modes can't be copied simply because of unsuitable for China, and it is also limited by listed companies'governance. Who owns anti-takeover's decision right in China is not only a simple question that gives the power to whom, but a process that distributes the power. Clearly devide the power into preventive anti-takeover decision rights and adversely anti-takeover decision rights. On this basis, further design preventive anti-takeover decision rights systematically. Under the guidance of the distribution of decision-making power, three proposals will be put forward on perfecting preventive anti-takeover legislation according to the state of the capital market and practices: Firstly, build a reasonable anti-takeover frame; Secondly, define the legal regulation of preventive anti-takeover measures; Thirdly, strengthen director's duty of loyalty and define director's duty of care. All of these will play an important role in regulating and guiding anti-takeover actions of the listed corporations.