A Research On The Motivation And Effect Of The Targeted Convertible Bonds Issued By Leike Defense For Merger And Acquisition Payment

As an important acceleration channel in the process of enterprise development,M&A payment mode has a significant impact on the financial situation,resource integration,enterprise development in the later stage and the interests of the acquiree of the enterprise after M&A,and the choice of M&A payment mode is also increasingly attracting the attention of the trading parties.With the drawbacks of traditional payment methods gradually emerging,cash and share-based payment methods are difficult to meet the interest demands of M&A subjects,to some extent,which hinders the development of China’s M&A market.In this context,in order to increase the vitality of the M&A market and accelerate the recovery of the M&A market,pilot policy of using directional convertible bonds as a payment tool for M&A was issued by the China Securities Regulatory Commission(CSRC)in 2018.Compared with share-based payment and cash payment,through the study of the emerging M&A payment method of issuing convertible bonds by specific case enterprises,this thesis tries to provide ideas for other enterprises to choose the M&A payment mode and promote the success of mergers and acquisitions from the perspective of the choice of payment methods.This thesis takes the targeted convertible bonds as the research object,and takes the targeted convertible bonds issued by Leike Defense to pay the purchase price and raises matching funds as the research subject,focusing on the motivation and effect of the payment of the targeted convertible bonds issued by enterprises.First,the first chapter combs and summarizes the existing reletive literature achievements,to understands the current research situation,and lays a theoretical foundation for the follow-up research direction;The second chapter describes the concept and theoretical basis of directional convertible bonds,to lay the foundation for the later discussion;The third chapter introduces the case of the issuance of targeted convertible bonds by Leike Defense,and mainly introduces the basic information of the two parties of the merger and acquisition,the motives for the merger and acquisition,the payment plan for the merger and acquisition,as well as the specific terms of the issuance of targeted convertible bonds and the progress of the transaction;The fourth chapter analyzes the motives of the acquisition and payment of the targeted convertible bonds issued by Leike Defense and the financing of supporting funds.It mainly analyzes and discusses the motives of the adoption of the targeted convertible bonds from the perspective of the policy support,the internal financing needs of the enterprise,ownership structure,equity financing and the terms design of the targeted convertible bonds issued by Leike Defense;Then,in the fifth chapter,we analyze the effect of the issuance of directional convertible bonds from the perspective of market reaction in the short term,financing performance,equity conversion and its impact on shareholders’ equity,financial influence and potential risks to enterprises.Based on the above research,this thesis draws conclusions and puts forward corresponding suggestions in the sixth chapter.Through research,this thesis mainly concludes the following conclusions: First,the targeted convertible bonds issued by Leike Defense bring a negative market effect to the enterprise.Second,the targeted convertible bonds issued by Leike Defense optimize the capital structure of the enterprise.There is no excessive increase in the financial risks of the enterprise,but due to the influence of the equity price,the timing of the stock conversion,and the value of the positive shares after the conversion of the stock.Third,The targeted convertible bonds have remitted the degree of dilution of the Region’s defense equity.Fourth,the targeted convertible bonds issued by Leike Defense help the company to improve financial performance.Fifth,there are potential risks of the targeted convertible bonds issued by Leike Defense.Based on this,in order to provide reference to other companies,and combined with the potential risks and problems existing in the process of targeted convertible bonds of the Leike Defense,this thesis proposes some suggessions,such as select a reasonable merger and acquisition payment mode,consider the theoretical value to make a price of convertible bonds,supply asset compensation compensation and perfect correlative policies and laws.Suggestions with the clauses of the lock-up period to ensure that the payment method of targeted convertible bonds can be better achieved and promote the achievement of mergers and acquisitions transactions.