Series 79: Going Private

Going Private

A company’s management may decide that the company no longer reaps sufficient benefits to justify the costs and burdens of having publicly traded shares. In that case, the company can become eligible to “go private” by reducing the total number of shareholders to fewer than 300. Many companies went private following the passage of Sarbanes-Oxley, which imposed significant reporting and certification burdens on publicly traded companies and their executives.

Absent a merger, a tender offer is the typical means by which a company goes private. (Alt