Research On Tender Offer And Minority Shareholders' Interests Of Listed Company In China

Tender offer is one way taken by acquirer(or raider)to gain or strengthen control of target company,in which case the acquirer will buy all or some stocks of the target company on specific price and time,its typical characteristics lie on two aspects:(1)The offer is designed to all of the stock holders and they have rights to accept or sell out holding stocks.(2)The offer is inalterable and irrevocable,according to Securities Law,as soon as the offer is sent out,its important elements as bidder price and means of payment are irreversible,unless exceptions of law.Tender offer,as well as negotiated acquisition,are two main operations in mergers and acquisitions.Before 2003,negotiated acquisition played a leading role in mergers and acquisitions among Chinese companies for its simplification and customization.Then in 2003,the tender offer case of Nanjing Iron &Steel Co,Ltd brought tender offer to the public,after that,as audience of offers,the minority shareholders of target company and their interests become focus of supervision and academic research.Focusing on the protection of minority shareholders' interests of listed company during process of tender offer,the auther carrys out research from two perspectives:(1)From the perspective of pricing mechanism in tender offers,the bidding price is the core factor of tender offers,it reflects whether the shareholders of target company have rational rights to sell their holding shares.Besides,it often happens as the tender offer cannot proceed as planned.When listed company declared failure of the tender offer,the minority shareholders of target company have to shoulder huge loss due to several down limits of limited company.In order to avoid risk or loss of tender offer failure,the author studies outcome of tender offers and possible affecting factors on empirical analysis,which is the first part of the thesis.(2)From the perspective of stock market performances,With calculating average cumulative abnormal return(ACAR)of target company stocks during event window(-30,+30)and empirical analysis of minority shareholders' interests and its affecting factors,the author studies the possible changes of shareholders' interests in tender offer,which is the second part of the paper.With collecting tender offer samples happened between 2003.6 to 2017.8 and theoretical and empirical analysis,two conclusions are got:(1)Bidding price is the core factor affecting outcome of tender offer.Concretely,its discount off or premium on market price affects outcome directly,in which case the minority shareholders' interests are affected.In addition,other affecting factors including ownership?factors in industry or in firm: when tender offer is happened in strategic industries?the target company is state-owned company and two sides are negotiated during the process,the tender offer will get a higher opportunity to success.(2)During event window of(-30,+30),minority shareholders of target company can get positive ACAR,whose empirical test is prominent,at the same time,when two sides of tender offer are business related or industry related,then the minority shareholders can get long and persistent CAR.