Beschreibung:
We develop a new method based on option pricing approach to examine wealth effects of creditors in mergers, because the present method which highly dependent on the bond price information is infeasible in undeveloped market like China. With the sample of 251 of Chinese listed companies during the period 1997 to 2007, we find that the creditor of the ST experiences a increase of equity value and obtain significant wealth effects in the merger activity, while the creditor of the healthy experience a decrease of credit value and obtain no wealth effects. Simultaneously the creditor's expected return increase largely for mergers of the healthy although the history return cannot change during the merger period. we argue the reasons for the decrease of credit value and increase of the creditor's expected return can be ascribled to the agency conflictions and information asymmetry between the creditor and the new controlling shareholder