Study On Private Exchangeable Bonds In Mergers And Acquisitions

On November 30,2016,Apex announced that it had completed the acquisition of Lexmark,which cost 3.9 billion dollars.It's the largest cross-border acquisition of the office printing industry functions in China.It's also the largest private exchangeable bond in A-share market.As a new type of financing,private exchangeable bond has aroused great concern in the capital market.The nature of private exchangeable bond determines its natural advantages of low-cost financing and share reduction.And exchangeable bond improves the bond market in China.In China,exchangeable bond is a new financing tool.Since 2013,exchangeable bond entered the blowout stage of development and private exchangeable bond accounted for the majority.Basic characteristics of exchangeable bond determine that exchangeable bond has the positive significance to shareholders,investors and capital market.Issuers can achieve the purposes of low-cost financing and stock holdings.Exchangeable bond can increase the choice of investment diversification and decentralizes investment risks.Exchangeable bond can stabilize the capital market and increase the transparency of information.In the case,the paper introduces the process of M&A,motivation and background.Meanwhile the paper analyzes the trade structure,valuation models and the financing way.Private exchangeable bond plays a decisive role in the case,which stabilized Apex's holding position and acted as a lever to move large M&A loan.Based on terms analysis and risk analysis of "16 Seine 01",the theoretical knowledge is applied into the case analysis.Through bond introduction and analysis of the private exchangeable,the paper draw a conclusion that think private exchangeable bond has a strong generalization in capital market of China,which can be able to solve the problem of financing of a private company.In the process of promoting,the issuer will face many risks,for more objective risks.The issuer should keep stable business operation,pay more attention to market dynamics,and complete the risk control to maximize the role of private exchangeable bond.