| In recent years,under the influence of macroeconomic downturn,more and more traditional enterprises have entered a bottleneck period.In this regard,most of them choose to promote the transformation of their main business through crossborder mergers and acquisitions.However,the existence of information asymmetry in corporate mergers and acquisitions puts the acquirer at an information disadvantage.In order to protect their own interests,the acquirer usually introduces a betting agreement.The betting agreement is a valuation adjustment mechanism and can also be regarded as an option.The higher the uncertainty in the future,the more valuable the betting agreement is.In merger and acquisition activities,the two parties will agree on future performance targets.If the financier fails to reach the target,the investors will be compensated according to the terms of the bet to adjust the excessively high valuation of the financier.Similarly,if the financier exceeds the target,the investor will also give certain rewards to make up for the low valuation.In recent years,betting agreement has been widely used in the capital market as a tool to avoid risks.On the one hand,it protects the interests of investors and promotes the completion of merger and acquisition activities.On the other hand,it also broadens the financing channels of SMEs and verifies the correctness of strategic transformation in cross-border mergers and acquisitions.However,through the analysis of its practical application,it is found that the betting agreement usually ends in failure,and it may exacerbate the principal-agent problem,and make the management appear short-sighted behavior under the pressure of performance.Based on this,this paper first introduces the concept of betting agreement and related theories,and then summarizes the characteristics of the education industry,the status quo of merger and acquisition,the risk of merger and acquisition and the application of betting agreement in the education industry merger and acquisition.Then,on the basis of the betting case between Qinshang Stock and Longwen Education,the analysis of the whole betting terms found that the betting terms obviously have problems such as high valuation,unreasonable performance objectives,and the assessment standards do not adapt to the characteristics of the education industry.Through the EVA method and the event study method,it is found that during the betting period,the enterprise does not produce good synergistic effect,mainly because of the poor follow-up resource integration of both sides.Finally,the paper analyzes the influence of the betting process and the failure of the betting,and puts forward several suggestions on the application of the betting agreement in cross-border mergers and acquisitions.This paper draws the following conclusions: First,the betting agreements fail repeatedly in cross-border mergers and acquisitions,mainly because the valuation of the underlying assets is too high,and the merger and acquisition parties agree on unreasonable performance targets.Second,in the high-premium M&A activities,the failure of betting will not only bring huge goodwill impairment to the investors,but also reduce the market’s confidence in the company,leading to the decline of the stock price,thus damaging the interests of minority shareholders.Third,the merger and acquisition parties should not rely too much on the betting agreement.After the completion of the merger and acquisition,they should actively integrate resources,develop the core competitiveness of the core enterprise,and complete the smooth transformation of the investor to the new business. |
