Ease of acquisition

Viewing 6 posts - 1 through 6 (of 6 total)
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  • #93227
    Vishal Patel
    Participant

    What type of acquisition is easier between a publicly traded or privately owned organization and why?

    #93365
    Jianxiong Zhang
    Participant

    A privately owned organisation acquisition is easier.

    This is due to:
    1.) Less interference from board members/shareholders
    2.) Straight forward transaction
    3.) Tend to deal directly with business owners and lessen chain of communication

    #93437
    Manish
    Participant

    This will be dependent on a number of factors such as if the stock is widely held, are there majority shareholders, is the company in distress and what regulatory approvals are required? A privately held company with a single shareholder might be more challenging if the price they demand is not reflective of fair value, compared to a public company that may or may not be widely held but where the board has a fiduciary duty to evaluate an offer.

    #95972
    Lisa Hall
    Participant

    Other factors to consider include the goals and complexity of the integration after the acquisition is approved.

    #96905
    Lana Ilchenko
    Participant

    I think there are complexities in each type of company. For example, in some countries private companies don’t have to make their accounts publicly available, making an initial approach that much harder and due diligence potentially longer. One may end up doing quite a bit of expensive work with an offer being rejected due to inflated expectations by the current owner. The cultural integration may also be more complex, especially if acquired by a public company.
    On the other hand, acquiring a public company will be ‘very public’, so to speak, with more regulatory and market scrutiny, which can damage both companies if doesn’t materialize or succeed.

    #97239
    jsyed
    Participant

    Private companies have less red tape to navigate. They still have to navigate the same complexities when doing due diligence for strategic, cultural, and financial alignment.

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