A group of individual investors is in the process of acquiring all of the publicly traded shares of OM Outfitters. Once the shares are acquired, they will no longer be publicly traded. Which of the following terms applies to this process?
A) Tender offer
B) Proxy contest
C) Going-private transaction
D) Merger
E) Consolidation

Question

Quizplus · Accepted Answer

This process is called a going-private transaction, in which a group of investors acquires all publicly traded shares of a company, effectively taking it private. In a going-private transaction, the company no longer trades shares on public markets, and the group of investors becomes the sole owner of the company. Tender offers involve an offer to purchase shares from existing shareholders, while proxy contests involve soliciting votes from shareholders to replace the company's board of directors. Mergers and consolidations involve the combination of two or more companies.

A Group of Individual Investors Is in the Process of Acquiring