What is a going private transaction?

A going private transaction is a legal agreement that is made in the corporate world when a publicly traded company decides to become a private company. In California, a going private transaction typically involves a buyout, when one or more entities make an offer to purchase the company’s outstanding stock. This offer must be approved by the shareholders of the company. In a going private transaction, the company’s board of directors will evaluate the offer and consider the best interests of the company as a whole. If approved, the offer will be sent to the shareholders who can accept or reject it. A company may decide to go private for a variety of reasons. The most common reason involves taking the company out of the public market to reduce costs or increase profits. As a private company, the board of directors no longer has to comply with certain regulations that would otherwise be required when the company is publicly traded. Additionally, a private company does not have to disclose financial information in the same way a public company does, so confidential information can remain private. However, when a company goes private, investors no longer have the opportunity to buy and sell shares on the open market.

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What is a going private transaction?

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