| In order to enrich The listed companies' Merger and Acquisition payment instruments and promote the development of Merger and Acquisition market,the CSRC issued a document on November 1,2018 to promote The targeted convertible bonds as a payment instrument for Merger and Acquisition.This paper studies the influence of payment instruments on the pricing of Merger and Acquisition transactions by comparing The targeted convertible bonds with cash and shares.This paper takes the Merger and Acquisition events of A-share listed companies in 2018 and 2019 as samples.By comparing the relationship between the value of different payment instruments and the Merger and Acquisition premium rate,it is found that the value of The targeted convertible bond payment instruments is higher than the value of cash payment instruments and share based payment instruments,and the Merger and Acquisition premium rate is lower than that of cash payment and share based payment.The reason why the difference is not obvious is that the sample data is too small and The payment proportion of The convertible bonds is various.Through case study,it is found that high-tech enterprises can reduce the Merger and Acquisition premium rate significantly by using The targeted convertible bond payment tools.This paper argues that the root of the problem lies in the different liquidity of different payment instruments,resulting in different values.The value of The targeted dconvertible bonds includes the value of creditor's rights and the value of options,which leads to higher value than cash payment and share payment,increases the negotiation flexibility of merger and acquisition transactions,and makes the merger premium rate tend to be reasonable.The conclusion of this paper shows that in Merger and Acquisition,we should enrich the payment instruments,improve the flexibility of the pricing mechanism of Merger and Acquisition transactions,and make the Merger and Acquisition premium more reasonable. |
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