Hostile Takeover And Amendments Of Articles Of Association

Hostile takeover often occurs,after China's capital market went into the full circulation era.According to the Agency Theory,the Control Power Theory and the Disciplinary Theory,hostile takeover is one of effective external corporate governance and supervision system.It can supervise and promote companies whose management efficiency and operating performance are poor to improve skills of operation and management.However,according to the Stakeholder Theory and the Wealth Transfer Theory,shareholders get takeover premium,which are transferred from creditors,employees,customers,managers or other stakeholders.Therefore,hostile takeover will damage legitimate benefit of other stakeholders.In July 2015,Shenzhen BaoNeng Investment Group Co.Ltd purchased Vanke stake to 5%of Vanke total equity,which triggered the competition for the control power of Vanke between the founder team of Vanke and BaoNeng Group(referred to as "BaoNeng and Vanke Event").In China's capital market,"BaoNeng and Vanke Event" led many listed companies to amend articles of association.They added anti-takeover clauses to articles of association.This paper collects and classifies anti-takeover clauses in articles of association of A-share listed companies of China's capital market.The time range is from the Tenth,July,2015 to the Seventh,March,2017.What's more,this paper makes descriptive statistics for per kind of anti-takeover clauses and find that the most clauses which listed companies added to the articles of association are the terms of secondary offering.And the second more clauses are the terms about the procedure of board of directors and stockholders' meeting,such as terms of restricting rights of nominating directors and changing the amount of directors and super-majority terms.Furthermore,this paper qualitatively analyze content,operating principle and effect of anti-takeover clauses.In accordance with categories of anti-takeover clauses,this paper chooses 1-2 listed companies to illustrate anti-takeover clauses in articles of association and analyze why many listed companies added anti-takeover clauses to the articles of association.Finally,on the basis of retrospect and analysis of "BaoNeng and Vanke Event",using the experience of other countries for reference and combining with the actual situation of our country and listed companies of China,this paper puts forward suggestions to improve China's corporate governance and operating efficiency of China's capital market by descriptive statistics and the qualitative analysis of anti-takeover clauses in the articles of association.