Research On Risk And Preventions Of "PE+Listed Company" M&A Funds

In the context of the transformation and promotion of China’s economy and the high-quality development,a new tide of mergers and acquisitions has been aroused under the support and guidance of various industrial policies and the vigorous development of the market economy.The China Securities Regulatory Commission clearly proposes to encourage investment institutions to enter into the mergers and acquisitions on the premise of legally establishing mergers and acquisitions funds,equity investment funds,and venture capital funds.The "PE+listed company" M&A fund has gradually developed under this background.This kind of M&A fund combining industry and finance serves the listed company,which facilitates the integration of resources in the industry and realizes the expansion of the industrial scale of the enterprise.Although this model of M&A funds has broad prospects for development,a considerable part of them,after the release of relevant announcements,brought a substantial rise in short-term stock prices for listed companies,but they were shelved and made no progress for a long time.Become a zombified fund and encounter a bottleneck in development.Due to the short development and usage of "PE+listed company" type M&A funds in our country,relevant laws and regulations have not been perfected,and supervision is lacking.In addition,the participation structure of this type of M&A fund is complex,the proportion of investment by all parties is quite different,and the withdrawal Due to its own characteristics such as a long market cycle,there are many risks that need to be prevented and dealt with urgently.By sorting out domestic and foreign researches on "PE+listed company" type M&A funds,it is found that the past researches mainly focused on the operation mechanism,mode selection introduction and development status research of M&A funds and "PE+ M&A funds",and there are more theoretical studies.However,the research on the risks and prevention of "PE+listed company" type M&A funds is insufficient,and a small amount of research on its risks is mainly limited to the overall risks such as principal-agent risks.In this paper,through the normative research method and case study method,Jiangxi Boya Bio and PE institution Gaotejia Hongrui Investment jointly set up a merger and acquisition fund to complete the analysis of the merger and acquisition of Xinbai Pharmaceutical,and identify the "PE + listed company" type of merger and acquisition fund.In the establishment stage,the risks that exist include the selection risk of cooperative PE institutions and the selection risk of M&A fund organization;the risks in the fund raising stage include investor compliance risk,credit risk and fund structure arrangement risk,etc.;Risks include the selection risk of the target company,the risk of investment decision and the risk of inappropriate use of the funds of the buyout fund;the risks faced in the post-investment management stage include the risk of incubation and incubation of the target company and the risk of insider trading;the investment target valuation of the buyout fund in the exit stage Risks,payment risks in the secondary mergers and acquisitions,integration risks between listed companies and target companies,etc.;the overall level of "PE+listed company" M&A funds has principal-agent risks and information disclosure risks.The preventive measures include that listed companies should carefully choose PE institutions with good qualifications,high recognition and market influence,and financing capabilities to cooperate.When signing the M&A fund agreement,the PE institution and the listed company should refine the terms and improve the restraint and incentive mechanism for the fund manager.M&A funds should carefully select other qualified investors to participate in investment,conduct comprehensive due diligence to strengthen the screening of M&A investment target companies,and set up scientific investment decision institutions to ensure the speaking right of listed.In the stage of post-investment management of M&A funds,the cultivation of target enterprises should be strengthened,and the integration of accouting,talents,vision,technology and other elements should stimulate synergies.Carry out scientific valuation of the target company,reasonably choose the exit timing of the M&A fund,choose a reasonable payment method for the second M&A according to the capital status and equity structure characteristics of the listed company,and sign performance commitments and compensation agreements to ensure minimum returns,etc.In addition,from the perspective of supervision,perfect and unified M&A funds laws and supervisory should be introduced,the information disclosure requirements of M&A funds at each stage should be refined,and a disclosure list should be listed,so as to realize the operation of "PE + listed company" type M&A funds.Only by conducting dynamic disclosures at different stages and increasing penalties for violations of disclosure can effectively prevent the risks of "PE+listed company" type M&A funds and allow them to develop healthily.