Going Private

[macdaddy]

I admit I know little-to-nothing about the NYSE and exactly how things operate. So I've got a coupla questions for anybody "in the know"...

In order take CART private, do the new owners need only acquire 51% of the outstanding shares?

What becomes of shareholders who wish to hold on to their stocks, no matter how many (or few) they own? Surely, they can't be forced to sell, can they? But how can you own stock in a private company?

In a nutshell, what I'm asking is, "How's this gonna go down?"

[Emfa]

Compulsory aquisition of shares is not unusual - it happened to us a few years back. The circumstances were a bit different - it was a hostile takeover, and when the aquiring company reached a certain level of holding (about 90-95%, I think) the remaining outstanding shares were aquired, then they proceeded to de-list the company that they had just bought.

I imagine that as soon as someone gains a controlling interest in the company (i.e. >50%), they will inform the NYSE, SEC and whoever else of their intention to de-list. But then, I'm not an expert, so I'm only guessing...

[¡As-de-mim!]

Taking a company private in order to save it is about as easy as jumping from the top of a burning skyscraper into a fireman's net. They are both desperate moves, requiring precision, faith and luck.
Once a decision is made to take a company private, the biggest challenge is to raise the funds required to purchase the minority shareholders' stock, according to Matt Foster, a Tampa, Florida-based partner with the law firm of Foley & Lardner. Companies that are successful and are able to offer minority stockholders a premium price for their shares are in a good position, Foster told the E-Commerce Times, because the risk of shareholder lawsuits is decreased. "[Shareholders] would be less likely to sue after receiving a price above market," Foster said.
Although Foster said that going private is a complicated procedure, he added that it does not take very long to close. A transaction accomplished through a merger could take as little as six weeks to complete, and a transaction involving a tender offer could be done in four weeks, the attorney said. Both types of transactions require the approval of shareholders and filings with the U.S. Securities and Exchange Commission. Once the deal is done, according to Foster, "the minority receive cash for their shares in a taxable transaction. The majority become sole owners of the company."


Complete Article: http://www.ecommercetimes.com/perl/story/9154.html

[¡As-de-mim!]

For more on the legal requirements of the process see:
http://www.sddt.com/reports/2003/04/lawtuesday/tc.cfm
and
http://www.bizval.com/Publications/E...e/elaw0202.htm

[Jay]

That's for most companies.... with Cart, buying up the minority's shares is the easy part. It's chump change to the investors... the difficult part is making it work next season.

[macdaddy]

Thanks, Mr. Cut-and-Paste! (¡As-de-mim!)

[¡As-de-mim!]

That's what the innernet is for. It's not the cutting and pasting, it's the info that is supplied.

[¡As-de-mim!]

So what is happenning now? C^RT doesn't have the funds available to take itself private. It could borrow the funds from another party, who would in essence become the new owner. Or in another scenario: There are at least two processes that will go on. The parties that will form the majority owners are in the process of setting up a company that will make the buyout offer. C^RT will have to change rules to allow for majority stock ownership. The new company can then begin making offers to public shareholders to purchase their stock. For CART to no longer be subject to the reporting obligations under the Exchange Act, the number of shareholders has to be less than 300. This can be accomplished by merger, tender offer, and reverse stock splits. Once the new company gains controlling interest, the privatisation process can begin in earnest. The goal is to merge the public company, C^RT, into the new private company. Until the buyers have 90% of the stock, they still need the permission of the remaining stockholders to merge the companies. After they get 90%, the remaining shareholders will be entitled to the purchase price under the merger agreement, or appraisal rights pursuant to relevant state law.

In a reverse split, for instance a 1 for 1000 split, anyone who owns less than 1000 shares will get the price of the shares they own and will no longer be a stock owner.

Each company has a way of evaluating the percentage of ownership by each party. It could be dollar value, percentage of investment, and could very well be tracked by internal "stocks" or blocks. Sort of like the office pool where for three dollars you own three blocks on the sheet.

[gttouring]

well with forsythe have the majority anyway, isn't thei easier done as the other players jump in and add to the pot: i.e. Newman or Gentilozi
so with 51% in onepersons hand the other 8.3% in Vaninni's hands that is already 59.3% how much does Newman own, and Patrick? kalkoven and what about gentilozi himself
Ibet all these men own roughly 90 some% together don't they?
so how hard is it going to be, I am sure Penske dumped his shares as he went to the other side- as well as Ganassi

[macdaddy]

¡As-de-mim!, I called you "Mr. Cut-and-Paste" referring to the way I've got to cut-and-paste your username because I can't type it on my keyboard! I remember mentioning that to you in a thread awhile back, and I just thought you'd get a chuckle out of it. That's all I meant. Thanks again for the links!