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For Listed Companies M & A strategy

Author: LiuXiaoYu From: www.yourpaper.net Posted: 2009-04-03 22:32:22 Read:
[Abstract] M & A the senior economic activity behavior, anti-M & M & reverse operation behavior. This article proposes anti mergers and acquisitions of listed companies operational methods and strategies, and a brief description of each phase of the anti-merger disclosure of information.

, M & A and anti-M & A

Mergers and acquisitions that "mergers and acquisitions", is the senior economic activity behavior, and contains active mergers and acquisitions of other enterprises behavior and passive behavior of corporate mergers and acquisitions. In theory, mergers and acquisitions generally be divided into four types of rescue mergers and acquisitions, collaborative mergers and acquisitions, contested mergers and acquisitions, and attacks mergers and acquisitions. The target company's Mergers and Acquisitions defense after two types of mergers and acquisitions.
Mergers and Acquisitions M & reverse operation behavior is taken by the management of the target company in order to prevent the transfer of control of the Company, designed to prevent or thwart the acquisition of the acquisition of the Company's behavior. It is based on the M & A activity, kept compatible with the M & A activity. The core of the anti-M & A is to prevent the transfer of control of the Company, directly aims to prevent the occurrence and development of malicious acts of passive mergers and acquisitions, to maintain the existing status quo. Anti-M & A subject of the action for the company's existing owners and operators, mainly for M & A activity to develop the actual operational program, its practical method to explore more practical and realistic significance.

Second, anti-M & A methods and strategies

The split share institutional barriers restricting mergers and acquisitions of listed companies in China. In the the stock tradable context after the full completion of the split share structure reform, the "Company Law", "Securities Law" and the listed company acquisition management approach "to encourage listed companies to become bigger and stronger through mergers and acquisitions. Split share reform program, the vast majority of companies are bonus shares on the price listed companies controlling shareholder's stake was diluted to a certain extent.
Currently, listed companies in China's traditional anti-takeover regulatory mode "general meeting of the United Kingdom the right to decide the mode, the acquisition of listed companies management approach" that embodies this idea. M & A in good faith does not involve the problem of anti-mergers and acquisitions, hostile takeover occurs, the target company can be taken to the following anti-takeover strategy in existing markets and legal environment:

(A) cross-shareholdings
Domestic law does not prohibit cross-shareholdings in listed companies, listed companies can reach an agreement with the trust companies, mutual holding each other shares and equity transfer to ensure that in the event of a hostile takeover, in order to achieve the defense hostile takeover purposes.

(B) Employee Stock Ownership
This design is based on the consideration of dispersion options, listed companies can encourage internal employees to hold the shares in the company, while the establishment of the Foundation, control and management. Hostile takeover occurs, the employee stock ownership proportion is relatively large, you can control a portion of the shares of the enterprise, enhance the decision-making control over hostile M & A M & difficulty.

(C) staggered board of directors system
The purpose of this system is to maintain the stability of the Board of Directors of the Company, which play a role against hostile takeover. Law and Articles of Association of Listed Companies Guidelines do not prohibit staggered board system, but whether or not to perform a staggered board system rights to the listed company's board and shareholders. To a certain extent, the stability of the Board is conducive to long-term development of the company. Listed companies in the articles of association of the company to follow the provisions of the Articles of Association of Listed Companies Guideline 96: "Director before the expiry of his term of office, the general meeting shall not be unreasonably relieved of their functions", while adding homemade Terms: directors in violation of the laws, regulations and other normative documents or the circumstances specified in the Articles of Association of the Company, the shareholders' meeting prior to the expiry of the term of office of a director shall discharge its duties, each year does not exceed 1/3 of the members of the Board ", which means that even if the M & A has an absolute majority of the company's equity, but also difficult to obtain control of the board of the target company, so that bidders can not be immediately restructuring of the Target Company.

(D) The director qualification censorship
This system is closely linked to the previous system. First adopted on the basis of stability of the system ensures that the Board authorize the Board to review the qualifications of directors can properly defend against malicious into the choice of the board of directors of the company. Same in the legal premise, the provisions in the articles of association of the company the conditions of the regulations mandatory homemade worked.

(E) super-majority voting provisions
Law and the Articles of Association of Listed Companies Guidelines did not limit the supermajority provision. Such as the "Company Law" Article 104: "the general meeting to amend the company's Articles of Association, increase or reduce the resolution of the registered capital and the merger, division, dissolution or change of corporate form of resolution, must be one-third of the voting rights held by shareholders attending the meeting more than two-by. "but in the use we must be cautious, because the super-majority vote of the shareholders' meeting the terms of increase acquirer to take over, anti-M & A role of the restructuring of the company difficult, but at the same time also limits the control of the controlling shareholder. Immediately after the holding of the acquirer can modify the Articles of Association, the Board of Directors of the super-majority voting provisions do not constitute a real anti-merger obstacles.

(F) Issue of restricted voting stock
The distribution restrictions voting stock is an effective anti-merger countermeasures. Issue of shares, the shares held by the original shareholders will drop in the proportion of shareholding will be diluted. When the company by the threat of mergers and acquisitions, the original shareholders of the company's control will be weakened. When listed companies to issue restricted voting stock, because the target company focused on the right to vote, you can prevent the hostile takeover by and control the company through the acquisition of issued and outstanding shares, both to raise the necessary funds, but also to prevent acquisition by another company purposes.

(7) parachute plan
The parachute plan is achieved by increasing the replacement cost of the employees. Since the target company after the merger, followed by frequently management replacement and layoffs. Concerns for the staff on this issue, it is designed parachute anti-merger plan. Stipulated in the contract signed by the company directors and senior managers with the Target Company: Target Company mergers and acquisitions to take over, its directors and senior managers sacked, received a huge amount of one-time pension, stock option income or additional allowance to increase in merger and acquisition costs. Personnel arrangements and treatment of the target company after the merger, the absence of express provisions to the parachute program may result in disguise to carve up the assets of the company or state-owned assets should be resolved from the point of view of the social insurance safeguard the livelihood of the target company's management and staff.

(8) Staff Director System
109 of the Companies Act states: a listed company may set up a trade union director, staff director of the workers' congress elections. That employee directors as a member of the Board of Directors, the reigning equity ratio of the size of decision, which ensures the original holding be increased by setting the employee directors in the board of directors the right to speak. (9) asset acquisitions and divestitures
To fight back through the acquisition of the bad assets or the sale of high-quality assets to be acquired by the common method of foreign anti-takeover battle. The acquisition of listed companies management approach "does not completely prohibit the anti-takeover strategy, but only limited to operating difficulties companies operating troubled companies often have no ability to use this strategy.

(10) invited the "white knight"
If you are not satisfied with the hostile takeover of listed companies can be an invitation to the satisfaction of the partners (white knight), involved in the acquisition at a higher price, to deal with the hostile takeover situation caused by third-party hostile takeover bid mergers and acquisitions of target companies. From the current regulations, the managers of China's stock market is still relatively inclined to anti-takeover strategy, this acquisition will bring competition is conducive to the protection of the interests of the shareholders as a whole.

(11) Packman Defense
Takeover of attacks, not passive defense, but in turn or disk acquired the acquiring company, or to sell part of the benefit of the Company, including the transfer of part of the shares is conditional on the acquisition, instigated and Company The close allies come forward to buy the shares of the Offeror to achieve the effect of Weiweijiuzhao. Pac Man defense based on the characteristics of the offensive, both offensive and defensive role reversal, caused by the other passive situation. Pac Man defense anti acquirer can control them, can attack and defend from the anti-takeover effect. Into the acquisition of the attackers; keep self-defense forced the attackers to abandon their attack attempts; retreat to owners of the Company of the shares of the acquirer, even if the acquisition of successful attacks also can share the benefits of the acquisition is successful.
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