A Discussion of Company Value under the Issue of Mergers and Acquisition

• Main Author: 李明雄
• Other Authors: 涂一卿
• Format: Others
• Language: zh-TW
• Published: 2003
• Online Access: http://ndltd.ncl.edu.tw/handle/62941019524922965925

碩士 === 大葉大學 === 事業經營研究所 === 91 === ABSTRACT This study aims at understanding whether the range of overprice is reasonable and the attitude of the takeover company when a corporate hostile takeover takes place .Through the case of the actual mergers and acquisition happened in Taiwan，Tingyi （Cayman Islands）Holding Corporation’s hostile takeover of WeiChuan Corporation ，this study analyzes if the evaluations of company value through evaluation models before the takeover support the actual acquisition price and examines the target company’s performance in operating efficiency after the takeover . This study hopes to give takeover companies some help in their evaluation processes . This study also uses different evaluation models to evaluate the target company value. The cost of Free Case Flow （FCF）in the evaluation model is calculated by Weighted Average Cost of capital （WACC）. And the company’s cost of Equity is calculated by Capital Asset Pricing Model（CAMP）. Findings of the Case Study and Suggestions： The case of the mergers and acquisition of Tingyi Holding Corporation’s purchase of stocks of WeiChuan Corporation is a typical and interesting case of the Hubris Hypothesis theory . After a systematic analysis，two main points comes out of this study，which can be considered by the takeover company when doing evaluation of the target company value： （1） The range of reasonable overprice：The range of overprice is in positive proportion to the realizability of the motivations of the hostile takeover . That is , the higher the realizability of the motivations , the higher the overprice . （2） Avoid Hubris evaluation：If a hostile takeover company overestimates its management ability and underestimates the target company’s operating efficiency , and therefore pays too high an overprice to take over , this will result in serious capital loss and causes operating inefficiency after the takeover , and consequently bring about great risk . Key Words : hostile takeover , corporate evaluate , Hubris hypothesis , range of overprice