| Summary: | 碩士 === 東吳大學 === 法律學系 === 97 === Mergers and acquisitions (M&A) are the major strategies for modern enterprises to enhance the competitiveness and management efficiency. One of the main purposes of M&A is to obtain the corporate control power of the target company. A basic and typical model for a sale-of-control transaction is when a buyer, in an attempt to control a target company, privately and directly deals with a controlling shareholder of that company to purchase her control block so as to gain the controlling position of the target company. One of the major costs in such transaction is the price-per-share paid over the market price-per-share (i.e. the control premium) necessary to induce the transfer of control. A control premium simply represents the empirical difference between the prices that buyers are willing to pay for the control block and the prices that buyers are willing to pay for the shares that do not convey control of the corporation. Therefore, it is important to understand what constitutes a control premium, why a bidder is willing to pay a premium for the control block, and how a buyer con recoup control premium costs in the future.
This thesis begins by asking “What is the meaning of “Control”?” “What is the meaning of “Controlling Shareholder”?” “What are the reasons for control premium?” “Should the control premium share with minority shareholders or belong to controlling shareholders only?” “What is the relationship between sale-of-control transactions and maximization of social wealth?” This paper will try to summarize the theories of scholars and through economic analysis about “Should the control premium share to minority shareholders or not”. Besides, this paper will summarize the rule of the jurisdiction of U.S.A regarding control premium and analyzes some important cases in the U.S.A. Finally, this paper will introduce the leading case about control premium in Taiwan- The Carlyle Group acquired Eastern Media International Corporation (EMC), and then puts forward my proposed view about control premium in Taiwan.
This paper is trying to study on control premium from the perspective of economic analysis. Like all other forms of corporate takeovers, motives for a sale-of-control transaction range from realizing synergy gains and replacing inefficient management to enjoying better accesses to personal benefits. In any sale-of-control transaction, the post-transaction value of a target company could increase or decrease as a result of the value of synergy gains, a better or worse management, or any of a variety of other reasons. For a policy to maximize social wealth, the rules regulating sale of control transactions should encourage those that increase the post-transaction value of a target company (i.e. efficient transfers) and discourage those that decrease the post-transaction value of a target company (i.e. inefficient transfers). Therefore, when evaluating the pros and cons of a rue governing sale of control transactions, such policy goal shall be a crucial standard. A transfer of control from an existing controlling shareholder to a new controlling shareholder will be value increasing if and only if the new controlling shareholder has a greater ability to produce value. Therefore, if a rule governing sale-of-control transactions does not take into account the policy goal of maximizing efficiency, or if it leads to the opposite result of either blocking efficient transfers or facilitating inefficient transfers, it will be to the detriment of the economic society as a whole.
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