Practicing Success
When the management of a company acquire control by buying out the present owners, it is called as: |
Going private Leveraged buyouts Hostile Buyout Reverse acquisition |
Leveraged buyouts |
The correct answer is Option 2:: Leveraged buyouts Leveraged buyouts (LBOs): It means management of a company acquiring control by buying out the present owners. Going private: Some of the owners/managers of a company buying all the outstanding stock, making the company privately held again. Hostile acquisition: Here, as the name suggests, the entire process is done by force. The smaller company is either driven to such a condition that it has no option but to say yes to the acquisition to save its skin or the bigger company just buys off all its share, thereby establishing majority and hence initiating the acquisition. Reverse acquisition: A private company takes over a public company. |