A novel class action suit is brewing. Shareholders in several public companies take private by big private equity firms like Blackstone and KKR say that these firms conspired to get good prices in the buy-outs. HCA, Harrah’s and Univision are mentioned in the court documents and the suit is based, in part, on an investigation that the Justice Department is doing into potential cooperation among the large private equity operations.If the plantiffs prevail or get far enough along to force a settlement, one of two things could happen. The private equity firms could pay shareholders a fee between the “fair value” of the public companies and what they paid for them as they were taken private. Or, they could give the companies back to the shareholders and take back the money they paid for the buyout.Most shareholders would probably just like a little more money per share, but the private equity guys may not see it that way.If a company is turned back to shareholders, they may do better over time. Any one of these companies could have a few good years and the share prices might rise. Riches for all.On the other hand, any one of these companies could have a few bad years. Or, the stock market could take a sharp downturn. Then shareholders would lose buckets of money. Of course, then they could sue the management.Note to shareholders of public companies being taken private: take the money and run.Douglas A. McInyre can be reached at [email protected]. He does not own securities in companies that he writes about.
Will The Companies Bought By Private Equity Get Turned Back To The Shareholders
Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.
McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.
His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.
A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.
TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.
McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.
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