Comment Letters and Large Asset Transactions: Evidence From an Emerging Market

Shuo Yang
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引用次数: 1

Abstract

This paper investigates how communications between regulators and firms affect the outcomes of large asset transactions (“restructurings”) in China. Examining stock exchange-issued comment letters that target individual restructuring filings, I find that characteristics indicating controlling shareholders’ expropriation of minority shareholders are associated with the severity of comment letters (“Severity”). The market reacts negatively to Severity. Severity predicts voluntary deal cancellation by management, and indirectly increases the probability of deal withdrawal and lengthens the processing time for equity-funded deals through affecting the approving body’s scrutiny level. Severity is also associated with lower post-letter disclosure quality rating. Textual analysis reveals that more concerns about a disguised reverse takeover, appraisal valuation and target assets quality are the most impactful, and demand for more disclosures is associated with larger revisions to restructuring filings. These findings are opposite to those of studies on comment letters and mergers and acquisitions in the U.S. (Liu et al., 2020; Johnson et al., 2020), reflecting the different role of comment letters under different institutions.
评论信和大额资产交易:来自新兴市场的证据
本文研究了中国监管机构与企业之间的沟通如何影响大型资产交易(“重组”)的结果。研究了针对个别重组申请的证券交易所发布的意见书,我发现表明控股股东征用小股东的特征与意见书的严重性(“严重性”)有关。市场对严重性反应消极。严重性预示着管理层自愿取消交易,通过影响审批机构的审查水平,间接增加了交易撤回的可能性,延长了股权融资交易的处理时间。严重性还与较低的信件披露质量评级有关。文本分析显示,对变相反向收购、评估估值和目标资产质量的担忧最具影响力,对更多信息披露的需求与重组文件的大幅修订有关。这些发现与美国对意见书和并购的研究结果相反(Liu et al., 2020;Johnson et al., 2020),反映了不同制度下评论信的不同作用。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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