Case Study On The Use Of Directional Convertible Bonds In The Merger And Acquisition Of Secote Company Limited

At present,China's capital market has become an important platform of merger and reorganization,in order to maintain long-term and stable economic development,the securities and futures commission to actively seek reform,in late November 1,2018 announced the CSRC pilot directional convertible merger and acquisition support the development of the listed companies ",actively promote paid in directional convertible bonds as a merger,acquisition and reorganization trading tools.The next morning,suzhou sai teng precision electronics co.,LTD.(hereinafter referred to as the " teng)has announced plans to issue the directional convertible bonds as a payment tool for mergers and acquisitions,mergers and acquisitions object is suzhou ling the automation technology co.,LTD.(hereinafter referred to as " ling " the science and technology),and on January 24,2019 approved by the SFC.As the first case of using directional convertible bonds as a payment tool to complete the merger and acquisition in China,the merger and acquisition of directional convertible bonds of sateng shares can provide us with rich information and guide the development of China's directional convertible bond market.Through the case study,point and surface,to find out the problem and then solve the problem,is conducive to improve the efficiency of China's mergers and acquisitions restructuring market reform.This paper first introduces the literature related to the study of enterprise mergers and acquisitions and the issuance of convertible bonds,explains the basic concepts,issuance factors and the high-speed development trend of convertible bonds in China,and introduces the special features of directional convertible bonds.Then it makes a detailed introduction to the m&a process and scheme in the case,including the equity distribution,operating and financial status of setang shares,the basic operating situation of lingou technology,the reasons for the merger of lingou technology by setang shares,and then it summarizes the m&a scheme and specific terms in the directional convertible bond.Analysis in case analysis,the m&a and the integration of directional convertible bond issue analysis,on the basis of the classical theory of mergers and acquisitions,citing a large number of data,analyzes the teng shares orientation in the process of the cause of the convertible bonds and the use effect,using comparative analysis method to the directional teng shares convertible bond terms compare in the same industry.Then,using the event study and equity change analysis,the author studied the effects of m&a in all aspects,including that it did not bring wealth effect to shareholders in the short term but improved profitability and earnings per share,delayed equity dilution and earnings dilution.Based on the above analysis,this paper summarizes the references and inspirations of this case from the perspective of enterprises,and puts forward Suggestions that are conducive to the application of directional convertible bonds in enterprise financing mergers and acquisitions.Against teng shares the comprehensive analysis of directional convertible merger cases,from the Angle of enterprises from the private enterprises are summarized,as well as facing the financing difficulties of small and medium-sized enterprises(smes)learning experience,affirmed the CSRC for directional convertible bonds as m&a payment tool innovation,affirmed the directional convertible bonds as payment tool,the unique superiority of affirmed the directional convertible bonds to promote the reform of marketization of merger,acquisition and reorganization,support state-owned,private holdings and other kinds of enterprises through the practical effect of the development of capital market of merger,acquisition and reorganization.However,China's directional convertible bond market is still in the pilot stage and still has a long way to go before it matures.It still needs the coordinated cooperation and unremitting efforts of the government,enterprises,financial institutions and regulatory authorities.