Research On China Listed Company Mandatory Bid Rule Legal System

Mandatory Bid Rule(MBR)requires that anyone acquiring control of a listed company is obliged to make an offer to be addressed to all shareholders for all their holdings at a price at least the good price.In 1968,Mandatory Bid Rule was enacted in British City Code on Takeovers and Mergers,lots of countries were followed this rules afterwards.In the intentions of legislator,the Mandatory Bid Rule would be designed to ensure minority shareholders to get premium during listed company transactions.MBR fully embody this design,while it still got controversy during acquire supervision process.With the booming development of China economic and securities market,merger and acquire became the strategic development way of listed companies.Mandatory Bid Rule was formally employed in 1993 Buying,Selling and Issuing Stocks Provisional Regulations as the core system of listed company supervisory.As the imported rules,MBR was used more than 20 years,while it got controversy on inefficient protecting minority shareholders and it also restrain acquiring efficiency on merger and acquiring,especially on stock rights concentration area.In this paper,we analysis MBR in China law history and relevant rules in China or abroad,it is found that through 20 years legislation adjustment and practice,MBR effect was weaken than before.We need not only to optimize MBR in China but also optimize lots relevant rules could do protect minority shareholders from listed company stock control right transaction.