Research On The Reduction Behavior Of Major Shareholders Under High Premium M&A

With the continuous warming of M&A,high premium M&A events are becoming more and more common.High premium M&A often presents the "double high" characteristics of "high goodwill and high valuation".Behind the "double high" lies the risk of performance deterioration and goodwill impairment,which will seriously damage the company’s value creation ability and the vital interests of small and medium-sized investors.At the same time,since the split share structure reform in China in 2005,due to the fact that the reduction rules of major shareholders in China are still not perfect,the major shareholders of listed companies are likely to use their information advantages to accurately reduce their shares to achieve personal interests.Therefore,it is necessary to study the reduction behavior of major shareholders in the context of high premium M&A,so as to protect the rights and interests of minority shareholders and promote the healthy and vigorous development of the capital market.High premium M&A means that the company has paid a higher premium in M&A,indicating that the company is very optimistic about the development prospect and value creation of the target company.However,in recent years,the phenomenon of shareholding reduction of shareholders of listed companies immediately after the occurrence of high premium M&A events is also emerging.The reasons behind this phenomenon can not help but lead people to think deeply.Therefore,this paper selects L company as the research object,studies the reduction behavior of major shareholders of the company under the background of high premium M&A,and analyzes the motivation and economic consequences of the reduction of major shareholders under the background of high premium M&A.In the context of high premium M&A,the main motivation for major shareholders to reduce their holdings is that the company faces great risks,poor performance prospects,the loss of corporate control and the acquisition of excess returns.At the same time,the reduction of major shareholders after high premium M&A will bring two economic consequences to the company: performance explosion and stock price collapse.Scholars have done a lot of research on high premium M&A and large shareholder reduction,but the literature on the motivation and economic consequences of large shareholder reduction under the background of high premium M&A is still rare.Therefore,the research of this paper helps to enrich the relevant theories of high premium M&A and large shareholder reduction.In addition,by analyzing the motivation and economic consequences of large shareholder reduction under high premium M&A,it helps to see the real motivation of company shareholders in high premium M&A activities,provides some reference for regulatory authorities to formulate relevant laws and policies,and also helps small and medium-sized shareholders enhance their awareness of risk prevention.