Listed Companies In China Market Reaction To The Tender Offer

Tender Offer becomes the primary way of takeover in western companies by reason of its marketization, standardization and vitrification.But the performance of Tender Offer is not making full use of favorable factors for the rights and interests protection of shareholders in china and occured the case of "Noboy accepts the offer". So the deep research across the market respond to Tender Offer of listed companies in this article is hoping to obtain more informations about the existing condition and influences.Firstly, after close analysis of all Tender Offer cases in Chinese stock showed there are the traits of compulsion,classification, distinct premium, higher proportion of the first large shareholder and so on.And then, in order to investigate the stock market react to the Tender Offer events by event study,26 Tender Offer cases are collected from Chinese Stock between 2003-2007 as the research samples.The abnormal return of stock prices (AR), the average abnormal return of stock prices (AAR) and the accumulate average abnormal return of stock prices (CAAR) are computed and statistical tested.The results indicate that,those un-exchanged common stockholders of the target corporations can acquire premium,but the exchanged common stockholders can not acquire any premium except when the target corporations will be forced to quit from the stock,the small stockholders' benefits will not be protected. There is significant positive correlation between the imformation of Tender Offer and CAAR and existing the phenomena of revealment in advance, which proves that there exists stock market transmission effect.Reaction pathway of market response has an analogy to the pathway of Semi-strong-form Efficiency, but we can not conclude that the stock market has Semi-strong-form Efficiency, there is the obvious functional fixation effect.The trend of stock market will influence the results of Tender Offer and the extent of premium and the purchase conpanies will choice different strategies and time for Tender Offer.Finanly, for the purpose of making full use of Tender Offer advantages,the article gives some advises, including resolving the the Chinese share splitting question actively, improving the prising and Partial Offer system, supervising behaviors of administrants and bringing up more rational investors.