Definition
A going-private transaction is any transaction that takes a public company private. The most common structure: a third-party (often private equity) launches a tender offer for 100% of the public shares, followed by a back-end merger that squeezes out remaining minority and delists the company.
Regulatory frame
Going-private transactions trigger Rule 13e-3 under the Exchange Act, which requires:
- A Schedule 13E-3 filing with detailed disclosure about the fairness of the transaction
- Disclosure of any reports, opinions, or appraisals received
- Discussion of why the controlling parties view the transaction as fair to unaffiliated holders
Why it matters
The 13E-3 disclosure regime is significantly more demanding than a vanilla tender offer. The SEC is alert to potential conflicts of interest in going-private deals, especially management-led buyouts.