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>To address your complaint on fairness, yes, you can be forced to sell because if most of the shareholders want to take the company private, it would seem fair
by pedrocr 10y ago
>To address your complaint on fairness, yes, you can be forced to sell because if most of the shareholders want to take the company private, it would seem fair from the majority's standpoint to accept its rule. Not perfect but I don't think there exists a better mechanism.
Why not just allow the option to let the company go private but let these stockholders retain their minority holding? If you, like the PE firm, think the company is undervalued by at least 20-30% why can't you just retain ownership through the deal and receive your proportion of dividends?
- ucha 10y agoIt's a good observation. Private companies with more than 500 shareholders have to obey a different sets of rule from those with fewer owners and must disclose financial performance in a way similar to that of public companies. Most of the time, you'd except to have more than 500 small shareholders that won't willingly sell.
- spinlock 10y agobecause you aren't a qualified investor and the SEC mandates certain obligations that the company must comply with to have you as an owner.
- ucha 10y agoThe company cannot solicit or sell non-accredited investors securities but they can remain owners if securities where previously purchased. http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=8edfd12967d69c024485029d968ee737&r=SECTION&n=17y3.0.1.1.12.0.46.176 http://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=8edfd12967d...