The Effects of Target Firm’s Operating Performance after Hostile Takeover － Based on Case Study of four Taiwan Companies

• Main Authors: Shou-Cheng Hsiao, 蕭守正
• Other Authors: HU, WEI SHAN JOHN
• Format: Others
• Language: zh-TW
• Published: 2002
• Online Access: http://ndltd.ncl.edu.tw/handle/27517177443735475161

碩士 === 中原大學 === 企業管理研究所 === 90 === The number of corporate mergers and acquisitions pushing to a new level as we enter into the 21st century, the wave of mergers and acquisitions is expected to continuously grow and expansion from European continent and the U.S. to Asia. Businesses, when confronting with an volatile external environment, are increasingly turning to acquisitions as one of the means for achieving the objectives of business expansion and competitiveness. There are substantial number of studies in Taiwan dedicated to corporate mergers and acquisitions, encompassing aspects such as motives, types, expected yield, strategy and legal ramifications, yet very few have been conducted to examine hostile takeover. The majority of the studies limited to focusing on the means and strategy of hostile takeover between the acquirer and acquired party. Hostile takeover is a process that has become one of the vital topics in business management despite the fact that a hostile takeover often comes with a hefty price tag. Taking to account public-traded companies in Taiwan, this thesis study features four hostile takeover cases that have succeeded and failed as means to conduct analysis and comparison on the takeover cases via content analysis approach. Among the four selected cases are three successful ones, WeiChuan Foods, Elitegroup Computer, and Grand Cathay and unsuccessful one, that of China Synthetic Rubber. Designed to focus on the target company’s performance in operating efficiency after the takeover, but also to concisely profile each of the cases presented, this work’s contents will also address the motive and type of a takeover, legal ramifications, strategy behind a hostile takeover, etc. As concluded from the selected case studies is that the presence of a precursor where the acquiring firm’s shareholding of the target firm is at 50% or higher would greatly improve the probability of a successful takeover, or else other takeover strategy will need to be incorporated in order to prop up the probability of a successful takeover. The target firm’s operating efficiency has greatly improved if the acquirer firm has the operating technology on the target firm’s core business. Moreover, a premature leakage of a takeover news tends to drive up the target firm’s share price listing to exceed 20% of its normal trading range can poise to strain the acquirer firm’s managing cost and long-term capital liquidity, which in turn dictate its ultimate success or failure. As a recap, recommendation is offered by this study in availing varied strategies to the acquirer and the target firm in anticipation to steer businesses to come to the right strategic decision-making in conducting a takeover bid or counter a bid, and to avail the investing public in rendering the right decision at the time of a takeover saga.