Companies That Went Private

Jul 20, 2022 By Susan Kelly

Private companies are those with no publicly traded shares. Private companies can issue shares to shareholders; however, the shares aren't traded on an exchange. Private companies aren't bound by the reporting requirement imposed on publicly-listed companies by the U.S. SEC. Private companies aren't subject to the pressure to provide rapid returns, which is the case with the majority of publicly traded firms.

Private companies, such as Private equity companies, offer the same benefits to publicly traded businesses they purchase and then purchase privately. After the deal's closing, the shares traded on the public market are removed from the market, with shareholders receiving the price for each share in cash.

Twitter, Inc.

On April 20, 2022, the messaging service operator signed the offer to buy out $44 billion of Elon Musk, the planet's most successful human, with a value of around $268 billion. Musk's wealth is largely due to his ownership stake in Tesla, Inc. (TSLA), the manufacturer of electric vehicles Musk manages. Twitter's (TWTR) shares reached over $77 in February; however, it was down over 50% from its peak at the beginning of January 2022 when Musk began to build up the 9.2 percent stake he announced in March. Musk received an offer and then accepted a spot on Twitter's board but turned it down the next day and offered an offer informally for $54.20 per share. This was in the form of a publicly released "bear hug" letter to the board of Twitter.

Twitter has adopted a poison pill shareholder rights policy to deter Musk from acquiring more stakes; however, it began talks with the billionaire when he announced that he was committing to finance for the deal. Musk stated that when the deal was concluded, the goal of Twitter was to provide freedom of speech and to improve the features of the platform.

H.J. Heinz

Heinz is the manufacturer of the ketchup brand that is famous dating back to 1869, as well as various processed food products; it signed an agreement to be bought through Warren Buffet's Berkshire Hathaway (BRK-A) and Brazilian investment company 3G Capital in 2013, in a deal that was worth around $28 billion with assumed debt. The company was formed in 2015 and joined forces in 2015 with Kraft Foods Group to form The Kraft Heinz Company (KHC) and with Berkshire Hathaway and 3G Capital making an additional investment of $10 billion to acquire a 51% stake in the newly formed company.

Dell Computer

Michael Dell, the chief executive officer (CEO) of Dell Computer, famously started the hardware company for computers in his college dorm. After the acquisition of EMC in 2015 as part of a $67 billion mostly debt-financed transaction, Dell was able to return to the public market in the latter half of 2018 with an unpopular exchange of Dell shares for VMWare tracking shares, which were included in the EMC deal. The deal was valued at around $24 billion. The deal was completed in 2021. Dell was able to spin off VMWare. Inc. (VMW) and transformed it into an unlisted public company.

Alliance Boots PLC

The European pharmacy and health care chain, which was listed on the London Stock Exchange (LSE), was able to set the record for the most leveraged buyout ever across Europe in the year Kohlberg Kravis Roberts & Co. (KKR), as well as billionaire of Italy bought for $22.2 billion in 2007 beating another consortium of private equity buyers. U.S. pharmacies chain Walgreens bought most of the company's private sector in 2012 and the remaining in 2014 in exchange for around $20 billion, including cash and shares, to create Walgreens Boots Alliance (WBA).

EQ Office

Equity Office Properties Trust, established by the real estate billionaire Sam Zell, was the most publicly listed commercial and office building across the U.S. when it agreed in 2006 to be bought through an affiliated company of Blackstone Group (BX) for $36 billion. The acquisition came after several bidding rounds with high stakes, and Blackstone ultimately won in the auction over Vornado Realty Trust (VNO). The firm changed its name to EQ Office in 2018.

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