Syllabus D. Corporate Reconstruction And Re- Organisation D2. Business re-organisation

D2ab. Going private 7 / 7

Syllabus D2ab)

a) Recommend, with reasons, strategies for unbundling parts of a quoted company.

b) Evaluate the likely financial and other benefits of unbundling.

Going private

A public company may occasionally give up its stock market quotation and return itself to the status of a private company.

The reasons for such move are varied, but are generally linked to the disadvantages of being in the stock market and the inability of the company to obtain the supposed benefits of a stock market quotation.

Other reasons are:

  • To avoid the possibility of takeover by another company.

  • Savings of annual listing costs.

  • To avoid detailed regulations associated with being a listed company.

  • Where the stock market undervalues the company‚Äôs shares.

  • Protection from volatility in share price with its financial problems.