Multiple Case Analysis Of Application Of Exchangeable Bonds In M&A Payment

The diversified development of M&A payment methods and the innovative application of M&A tools are of great significance to improving the efficiency of M&A.Compared with developed countries,mergers and acquisitions of Chinese listed companies are still relatively single,and the application of hybrid tools in mergers and acquisitions is also slow.In recent years,with the rapid development of exchangeable bonds,exchangeable bonds have begun to appear in mergers and acquisitions.Exchangeable bonds are corporate bonds issued by shareholders of listed companies that can be exchanged into the shares of listed companies held by the shareholders within a certain period of time according to the terms of the agreement,and are a combination of equity and debt instruments.The different effects of exchangeable bonds applied to different cases reflect the complexity of hybrid tools.This article studies the application of exchangeable bonds in mergers and acquisitions through multi-case analysis.On the one hand,it comprehensively analyzes the specific roles,application methods,attention problems,and suggestions for settlement of exchangeable bonds in M&A transactions,and provides relevant participants with theories.Guidance and practical reference;on the other hand,for the development of other hybrid tools applied to the development of mergers and acquisitions to provide reference,through the case analysis to enrich the theoretical exposition of the practical extension.Firstly,based on the analysis of related theories of M&A payment,exchangeable bonds and hybrid instruments,this paper deduces the applicability of exchangeable bonds in mergers and acquisitions,and provides a theoretical basis for case analysis.Through applicability analysis,this paper classifies the application of exchangeable bonds in M&A payment according to the three payment methods.In this case,we introduce the case of the acquisition of Lexmark,Mergers and Acquisitions of Lexmark,China Pearl Medical,and M&A Home Group,respectively.The application of the exchangeable bonds in the case,which summarizes and proposes three modes of application of exchangeable bonds in mergers and acquisitions,namely financing mode in cash payment,supplementary mode in share payment,and payment mode in hybrid payment.Improve the universality of the application reference.Finally,the paper extracts the application experience of the three cases,analyzes the issues that should be paid attention to in the application of exchangeable bonds,and proposes solutions to the problems.This article draws the following conclusion: In the financing model,exchangeable bonds have the advantages of financing and flexible repayment.Attention should be paid to the limitations of financing size and the failure of merger and acquisition integration.The solution is to issue in stages,differentiate terms and rationally assess the strength of the company..In the supplementary mode,exchangeable bonds have the advantage of reducing shares in advance and achieving a balance between equity and capital requirements.Attention must be paid to timing and terms of issue to set risk and arbitrage compliance risks.The solution is to avoid overconfidence and improve the professional capabilities of the intermediary.And improve regulatory rules to reduce arbitrage space.In the payment model,exchangeable bonds have the effect of increasing willingness to accept share payments and equity incentives.Attention should be paid to issues such as interest transfer suspects.The solution is to select appropriate targeted issuers and strengthen supervision of information disclosure.