Research On The Application Risks Of Gambling Agreements And Their Prevention

In recent years,with the expansion of the number and scale of mergers and acquisitions in the capital market,the application of gambling agreements in China's equity investment market has become more and more widespread.Although the gambling agreements can protect the economic interests of investors to a certain extent,it can solve the growing enterprises Difficulty in financing,but there are also higher risks.The investment and financing parties blindly signed the gambling agreement regardless of their actual conditions,which caused the abuse of the gambling agreement in the current capital market,which led to the failure of mergers and acquisitions.At present,the gambling agreement as a tool to prevent the risks of mergers and acquisitions has not fully and effectively exerted its positive role.Therefore,it is of practical significance to study the risks of the gambling agreements and their prevention measures in corporate mergers and acquisitions.This article selects Guangdong Media's merger and acquisition of Champs Media as the research object,and uses a combination of literature research and case studies.First,it expatiates the relevant researches of domestic and foreign scholars on the gambling agreement.Theories,real options theory and risk control theory,conduct an in-depth analysis of the case of Guangdong Media's merger and acquisition of Champs Media.From the perspective of the investor,this article analyzes the gambling agreement in the Guangdong Media M & A case and analyzes the reasons that led to the failure of this application.It is found that the main reason is that the wrong target was selected.In the absence of moral hazard from the management of both parties,the valuation of the target company is also not objective and reasonable,resulting in excessive premiums,and the terms of the signed gambling agreement are not reasonable enough,and the acquiree does not have sufficient performance capabilities.Finally,based on the reasons identified above,from the perspective of the investor,we put forward corresponding preventive measures for each risk point: as a successful start,we should choose the appropriate acquisition target;after selecting the target object,we need to Make reasonable assessment of the actual value of the target company;choose appropriate payment methods when designing gambling clauses,especially with special consideration on equity pledge issues;in addition,pay attention to the moral hazard of the management of the two parties before and after the merger;Later,it is necessary to strengthen the risk management and control of the acquiree.Through the research on the failure of the gambling agreement in the merger and acquisition of the Guangdong Media by the Champs Media,it is hoped that the risk of using the gambling agreement in the merger and acquisition will be minimized through effective measures,and it is an attempt to sign a gambling agreement in the future in China In order to control the risks of mergers and acquisitions,companies can provide certain reference.