Controlling Shareholder's Equity Pledge And Company Merger And Acquisition

In recent years,the phenomenon that shareholders of listed companies,including controlling shareholders,use equity pledge to finance is becoming more and more common in China's capital market.Because the controlling shareholder can avoid all kinds of restrictions of reducing holding and limiting sale and realize the activation of assets without the influence of control right.However,in the equity pledge contract,in order to protect the financial lender(pledgee)of the equity pledged capital,it often stipulates the terms of replenishment and closing positions when the price of the pledged stock falls during the financing period.From the second half of 2017 to 2018,when the A-share market fell significantly,the risk of closing the position of controlling shareholders' equity pledge has become a hot issue in the capital market,and even there are concerns about systemic financial risks.Once the stock pledge is broken,the controlling shareholders have a high probability of losing the control of the listed company.Therefore,for the controlling shareholders of equity pledge,in order to avoid the closing of the Pledged Shares and even the control rights,the controlling shareholders have a strong demand for short-term and medium-term market value management to stabilize the stock price of the company,and merger and reorganization is an important factor affecting the stock price,whether the stock pledge affects the merger and reorganization of listed companies has become a very important factor The question of meaning.Based on the literature of stock pledge and M & A at home and abroad,this paper analyzes the development and current situation of stock pledge and M & A in China,and understands the development process and current situation of China.According to the literature research and current situation analysis,the theoretical hypothesis of this paper is put forward.This paper makes a theoretical analysis of the influence path of stock right pledge on the merger and reorganization of listed companies,and puts forward the general path of "stock right pledge-prudent merger and acquisition of controlling shareholders-long-term stability of the company's stock price" and the short-term path of "stock right pledge-risk of stock right closing position-increase of merger and acquisition-short-term boost of stock price",and puts forward the corresponding theoretical assumptions.Then,the data of A-share listed companies from 2014 to 2018 is used as the research sample.Considering that the M & A behavior is discrete,the logit model is used to process the regression,and the robustness test is carried out on the regression results.The results of this paper prove that the impact of controlling shareholders' equity pledge on the merger and reorganization of listed companies is multiple.Generally speaking,the equity pledge can make the controlling shareholders pay more attention to the long-term development of the company's operating performance and the stability of the stock price,and reduce the risk-taking investment behavior.At the same time,the equity pledge also introduces new supervisors such as the financial lender of the pledged capital for the listed companies,which reduces the opportunistic behavior of the controlling shareholders.Generally speaking,the equity pledge generally reduces the probability of merger and reorganization of the listed companies.However,when the controlling shareholders are faced with the risk of closing positions,in order to avoid compulsory closing positions,the controlling shareholders will use M & A and reorganization to actively transmit the information of the company's business transformation and development to the market,and then hope to improve the stock price and remove the risk of closing positions by means of M & A and reorganization.