Research On The Causes And Risks Of Directed Convertible Bonds Mergers And Acquisitions

M & A is an important acceleration channel in the development of enterprises,but due to the impact of the global economic slowdown,the number of M & A transactions in China declined in 2018.In order to accelerate the recovery of the merger and acquisition market and increase market gaming opportunities,the Securities Regulatory Commission issued a pilot announcement of directional convertible bonds.The next day Saiteng announced that it would use directional convertible bonds as a payment method to purchase 100% equity of Lingou Technology.As the first A-share M & A of directional convertible bonds,its success represents that directional convertible bonds formally become a new type of M & A payment tool,but any payment method is accompanied by risks,and companies must be mentally prepared to recognize and prevent risks.This article hopes to use literature research methods and case study methods based on existing research to explore the motivations of Saiteng's choice of directional convertible bond payments and the risks that convertible bond payments will bring to mergers and acquisitions,and based on the terms of the design perspective Analyze the risk response measures taken by Saiteng and its deficiencies,and provide experience for other companies that use targeted convertible bond mergers and acquisitions.First of all,this paper analyzes the advantages of the dual attributes of convertible bonds' equity claims in mergers and acquisitions from four aspects of economic environment,corporate strategy,financial status and stock price level,and infers that convertible bonds are the best payment method in this example.Secondly,the risk analysis is carried out with the attributes of convertible bonds as the starting point,and it is found that the payment of convertible bonds brings certain issue risks,pricing risks,equity dilution risks and financial risks to enterprises.Then analyze the risk countermeasures of Saiteng from the perspective of the design of convertible bonds,and find that although the convertible bonds of the enterprise have reduced the above risks to a certain extent,there are still some deficiencies in the terms of the upper revision,the lower revision and the resale clause..Finally,this article puts forward suggestions on the shortcomings of the convertible bond risk response provisions,and summarizes some of the enlightenment of the case to the directional merger and acquisition of convertible bonds.