Study On Hostile Takeover Legal Issues

Hostile takeover was derived from the countries such as the United States and Britain. Its operational principle is that the buyer can takeover a corporation without the cooperation of the management of the target corporation . After the buyer become the new controlling shareholder, the management of the target corporation will be fired. Hostile takeover has the function of ejecting the non-efficiency management. Accordingly, hostile takeover can reduce agency cost and improve the corporate governance. Under the circumstance of weakness of corporate internal governance in our country, we should create all kinds of conditions to make hostile takeover take effect and make it play a very active part in corporate governance.This thesis makes an intensive study of all aspects of hostile takeover, comprehensively not partially; being detailed not trivially .On the basis of tradition this thesis also has lots of innovations. The thesis not only uses the experience of legislation of other countries for reference but also take the situation of our country into consideration to analyze issues. The attitude of author is constructive. The author uses the knowledge of economics, law, philosophy and sociology and takes hostile takeover as main line to study all kinds of external factors of hostile takeover and all kinds of rule of law and its ideas.This thesis consists of six chapters as follows:In Chapter one, in the beginning, the author makes a definition of hostile takeover and compares hostile takeover to malice takeover. Then the thesis introduces the legal system of hostile takeover of main western countries or areas such as the U.S, Britain, Hongkong, Germany and Japan. Finally, the author introduces the case of hostile takeover that took place in China and summed up the laws and characteristics of these cases.In Chapter two the author mainly studies the value of hostile takeover. There are two opposite viewpoints: supporting and opposing hostile takeover. The former argues that hostile takeover will be favorable to corporation because it can reduce agency cost and give rise to synergistic effects; The latter thinks that hostile takeover maybe do harm to markets because the added value is from interested parties by exploiting them. The thesis supports the value of hostile takeover and argues that hostile takeover should play an important role in corporate governance.In chapter three, first of all, the thesis studies the subject of hostile takeover, and especially place more emphasis on taking concerted action. Secondly the author studies the determination right of anti-takeover and points out our country should take the model of Britain and grant the determination right of anti-takeover to shareholder's meeting. Thirdly the author studies the means and ways of takeover including tender off, agreement takeover and takeover by the bid in stock market. Fourthly, the thesis introduces the all kinds of anti-takeover measures and comments on the related regulations of China's Company Law. Finally, the thesis studies the information disclosure system of hostile takeover.In Chapter four, the author studies the issue of protecting the interest parties related. This chapter is divided into two parts. The first half studies the protection issue of the shareholders of both buyer and target company. The second half is on how to protect the creditors of two sides.In Chapter five, the author argues that there will maybe be a conflict between the system of hostile takeover and the antimonopoly law. Consequently, the author insists on that we should keep them in step.In Chapter six, the thesis analyze the all kinds of factors that affect hostile takeover of our country and finally gives some suggestions on how to perfect the legislation system of hostile takeover in our country.