Mandatory Bid In The Interests Of Minority Shareholder Protection

Mandatory bid system in our country securities market is common. NanGang shares offer acquisition drove the attention of the public to mandatory bid, as the first case in Shanghai and Shenzhen securities market of China. Eventually no shareholders of the firm accept the bid obligations during the period of time given. Judging from the economic point of view, on the last day of the announcement of presentation, the closing price is 8.74, while the mandatory bid price is only $5.86 per share, so no shareholder is willing to accept the price. In our country, the fact that share division is very normal can not be denied, resulting in a large amount of non-tradable shares, in this case repricing is required respectively. Taking the acquisition going through and the interests of shareholders into consideration, the price of shares outstanding is slightly higher than the price of non-tradable shares.In the securities of trading, non-tradable shares usually have a larger proportion. In order to relief the pressure, the company can be controlled only by acquirig the non-tradable shares. In the situation that it can not be able to acquire the immunity, the acquirers booked a lower price, and small and medium-sized shareholders "free-rider" phenomenon is serious, that eventually the case ended with zero booking and zero to withdraw. It directly reflects the fact that there is a lack of institutional rules regarding listed companies takeover in our country, In addition, it is imperative for small and medium-sized shareholders to take measures to deal with information transparency related problems and non-tradable shares control rights abuse. It is time for intermediary organizations to set up a perfect system of guarantee regulations to improve the urgent situations faced by medium-sized shareholders.Learning from the British mandatory bid terms, immunity system and the seemingly loose offer, mature in protecting the interests of minority shareholders in America, we can cautiously analysis the problems in our country's mandatory bid NanGang case exposed. To a large extent, the interests of minority shareholders in the Mandatory tender offer can be protected by our efforts. At First, measures should be taken, such as improving laws and regulations, building the framework to protect the minority shareholders' interests, guaranteening voting rights to cancel out system and establishing the group litigation. Even solutions are put up with, including improving the representative litigation system, strengthening the efforts of disclosure the acquirer and the target company's information and regulating the fiduciary duty of the controlling shareholders of the target company; Secondly, it is urgently demanded to set up departments in government aiming at protecting the interests of minority shareholders and develop independent medium and related associations; at last, threat may be faced by small and medium-sized shareholders that major shareholders may take control of the firm in their personal interest, blemishing the target company, so self-discipline systems are necessary for big shareholder. As a result, full use of various ways should be made to adjust business strategy before investment and acquisition.