What is a going private transaction?

A going private transaction is a major corporate move where a publicly traded company is taken off of the stock market and the company returns to being privately owned. This process can be beneficial to a company when it allows them to cut costs and concentrate on long-term goals. In Washington, a going private transaction is a complicated process that involves a variety of steps and regulations. First, the shareholders of the company must vote to approve the going private transaction. All shareholders must also be provided with an independent financial report by a third-party so they can make an educated decision. Second, the board of directors must submit a plan of the proposed transaction to the state corporate authorities. This plan must include the company’s shareholders and creditors’ rights, a stock exchange agreement or a tender offer, and a payment plan. Third, state corporate authorities must approve the going private transaction. If they find that the transaction is not in the best interests of the company’s shareholders or creditors, they may refuse to approve it. Once all of the required steps have been completed and the transaction has been completed, the company will no longer be publicly traded and will become privately owned. Going private transactions can be beneficial to companies, as it can allow them to concentrate on long-term goals without having to focus on meeting quarterly performance expectations.

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What is a going private transaction?

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