Abstract:

The Value Adjustment Mechanism (VAM) is supposed to help alleviate the problem of information weakness on the part of the acquirer and facilitate the acquisition, and motivate the target company to improve its performance during the contract period. But recently, some “high valuation, high commitment” M&A transactions have gradually shown signs of speculation and arbitrage: Overvalued listed companies have a strong incentive to take advantage of the market opportunity to buy high-commitment companies, but these companies subsequently experienced a decline in performance, aggravating the risk of the acquirer.
In order to find out how the market opportunity of the stock price overvaluation affects the preference of listed companies for the target company’s performance commitment, and whether the target company’s performance commitment can be achieved, this paper based on the market timing theory and the principal-agent theory, taking the M&A transactions announced by A-share listed companies from 2010 to April 2020 as samples, applies the Stata14.0 software for multiple regression to examine the impact of the stock price overvaluation on the committed performance growth rate as well as the impact of the committed performance growth rate on the achievement of the performance. It further discusses the strategic manipulation of raising stock prices before M&A, as well as the principal-agent problem of the management.
Empirical research shows that overvalued listed companies are more likely to acquire target companies with higher committed growth rates, and in the case of share payment, listed companies are more prone to create overvalued market opportunities through a variety of channels including adopting positive earnings management, reducing accounting conservatism, and deliberately issuing over-optimistic earnings forecasts, as these measures will reduce the quality of the information disclosure of the acquirer and aggravate the information asymmetry, so that listed companies can issue fewer shares to complete the consideration payment and reduce the over-payment risk. However, the higher the target company’s committed growth rate is, the worse the achievement of the performance will be. Even if the target company achieves high growth this year, it will be more difficult to meet its performance goals next year. Especially when the acquirer’s principal-agent problem is serious, they are more likely to be driven by the stock price overvaluation to acquire high-commitment target companies, and then the performance default problem of these high-commitment target companies will become more serious.
These results show that listed companies’ management, driven by the stock price overvaluation, usually do not properly implement the valuation process for the target company, but blindly believe in its performance commitment. They may even regard the acquisition of high-commitment assets as a tunneling channel to obtain private welfare, which ultimately affects the M&A performance. These research results are helpful to reveal the impact of the stock price overvaluation on the listed companies’ investment behavior, and enrich the research on the VAM’s economic consequences. It is suggested that regulators should strengthen the supervision of “high commitment, high valuation” M&A with VAM to prevent the fraudulent restructuring and the stock price speculation, and listed companies be more cautious about the market opportunity of the stock price overvaluation.

Key words: Stock Price Overvaluation, Value Adjustment Mechanism (VAM), Performance Commitment, Achievement of Performance Commitment, Principal-agent Problem

摘要：

为探明股价高估的市场时机如何影响上市公司对标的公司的业绩承诺水平偏好,以及标的公司业绩承诺是否能实现,本文以2010~2020年4月A股上市公司公告的签订了对赌协议的并购交易为样本,实证研究发现,股价高估的上市公司更倾向于收购承诺增长率较高的标的公司,且在股份支付的情况下,上市公司有可能通过多种渠道主动创造高估的市场时机。但是标的公司业绩承诺增长率越高,实现情况却越差,在收购方委托代理问题严重的情况下,更容易受股价高估驱动而收购高承诺的标的公司,随后这些高承诺并购出现业绩违约的问题更加严重。研究结果有助于揭示股价高估对上市公司投资行为的影响,丰富对赌协议的经济后果研究。

关键词: 股价高估, 对赌协议, 业绩承诺, 业绩实现, 委托代理问题