What is a going private transaction?

A going private transaction is a corporate law term that refers to the process of taking a publicly traded company off the stock exchange so that it is no longer publicly owned. The company is then owned privately and its shares are no longer publicly traded. In Delaware, a going private transaction can take place for a variety of reasons. One common reason is that the company’s board of directors, with the approval of the majority of the company’s shareholders, feels that the market does not accurately value the company’s shares. Another reason is that the directors may want to take the company off the stock exchange in order to make it easier to make decisions regarding the future of the company without having to worry about the public’s reaction. Ultimately, the goal of a going private transaction is to provide the company’s shareholders with higher returns. By doing so, the company has more freedom to pursue longer-term goals and strategies that may not be as readily achievable on the stock exchange.

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What is a going private transaction?

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