The Subscription Of Large Shareholders And The Long-Term Performance Of Private Placement And M&A

Private placement and mergers and acquisitions(M&A)are hot spots in the capital market in recent years.Due to the characteristics of short issuing process,fast examination and approval,and high financing efficiency,more and more listed companies finance M&A through private placement.Because of the special institutional background of China,there is the feature of "one dominant share" in the capital market,and the major shareholders play an extremely important role in the private placement and M&A.Major shareholders are not only the actual controllers of the company,the supervisors of the management,but also the important participants of the private placement merger and acquisition.Their characteristics and behaviors can exert a significant influence on long-term performance.Since private placement is a refinancing behavior only for specific investors,it is very internal,and the transaction process and details of M&A are also difficult for ordinary investors to understand.Regulators,investors and scholars begin to pay attention to the impact of various factors in private placement on long-term performance and the possible risk points of interest transmission.This dissertation selects 300 A-share listed companies from 2006-2016 as samples,uses the index of enterprise value — economic value added(EVA)per share as proxy variable of long-term performance of listed companies,build multivariable model,and analyze the impact of characteristics and behaviors of large shareholders on the companies' long-term performance.The empirical results of this paper show that there is a positive correlation between the long-term performance of a listed company and the purchase of private placement shares by major shareholders and their affiliates.Due to the combination of private placement financing and merger and acquisition investment,private placement funds and merger and acquisition funds have a high matching degree,and have the characteristics of serving strategy and value driving,major shareholders mainly show the supporting effect on enterprise performance in private placement mergers and acquisitions.In the grouping regression,this paper finds that the above correlation is more significant in non-related mergers and acquisitions,and diversified mergers and acquisitions will weaken the positive correlation between the subscription of private placement shares by major shareholders and the long-term performance of enterprises.Combined with the impact of other indicators and long-term performance in the two stages of private placement and M&A,this paper believes that in the two stages of private placement merger and acquisition,the private placement stage has lower risk of interest transfer due to the stricter regulation,the regulator should pay more attention to the possible interest transfer and value infringement behavior in the M&A stage,such as related merger and diversified merger.Regulators should also pay more attention to the management and integration of the company after the private placement merger.Based on the above research results,this dissertation puts forward some suggestions,such as encouraging large shareholders to buy private placement shares,supervising related party transactions strictly,treating diversified mergers and acquisitions rationally and adjusting private placement regulatory policies according to the nature of the companies' property rights,.This article research results are beneficial for the research on motivation of long-term performance in private placement and M&A,fills the gap in the study combined the influence of large shareholders and characters of M&A.This study provides evidence for the supervision,suggestion for listed companies,and guidance for investors on investing companies which has private placement and M&A.