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Technology Stocks : WAVX Anyone?
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To: Scott Rafe who started this subject4/21/2003 12:24:43 PM
From: 24601   of 11417
 
on taking a company private:

Some of the bashoids depict "going private" as some magical process in which common shares are retired and stockholders' equity interests are extinguished for nothing. I don't think they have any clue what they're talking about.

There are three basic ways to "go private":

(1) merger agreement

Stockholders receive a proxy statement soliciting their votes. Common shares are converted into appraisal rights or merger consideration (cash or stock).

(2) tender offer

A buyer makes an offer to stockholders to buy their common shares. If he gets 90% of them he can do a short-form merger, without a proxy statement or vote, whereupon any shares not tendered are converted into appraisal rights or merger consideration (cash or stock).

(3) reverse split

Stockholders receive certificates representing whole shares and cash in lieu of fractional shares. In a 1-for-10,000 split, each stockholder who owned fewer than 10,000 shares would receive cash only. This method generally requires a proxy statement and and a vote of the stockholders on an amendment to the certificate of incorporation. If the number of stockholders of record falls below 300, the company may go private by redeeming shares as in the more usual cases.

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paraphrased from work of Messrs. Levitin and Snider of Hale and Dorr LLP
articles.corporate.findlaw.com
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