going private

going private definition - business

going private

The process by which a publicly held company has its outstanding shares purchased by an individual or by a small group of individuals who wish to obtain complete ownership and control. The group wishing to take the firm private may feel that the market is undervaluing the company. In addition, the purchaser(s) may not wish to meet the various requirements imposed on a publicly held company. Also called management buyout.
Case Study San Diego-based PETCO Animal Supplies announced in July 2006 that its board of directors had approved a $1.68 billion acquisition offer for the company by two private-equity firms. The offer of $29 per share was nearly 50% above PETCO's prior day's closing stock price of $19.45. The buyers also agreed to assume $120 million of PETCO debt. PETCO Animal Supplies was the nation's second largest pet supply retail chain and among several large specialty retailers to go private. More unusual was the fact that PETCO had been taken private once before, in 2000, before going public again in 2002. In both instances, a relatively low stock price attracted the investors who took the firm private.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

Comments
Improve this definition.
Do you have more to add? Share your linguistic knowledge or observation.
/Register to save your comments.