I saw these storylines on Y&R and Melrose Place. Is this true? You can buy up majority of stocks ANONYMOUSLY to take over a public company? How can one or business go about doing this?
In theory it can happen, but in practice it is almost impossible in the case of a company listed on a US stock exchange.
The SEC requires anyone who purchases more than either 5% or 10% of the stock of a public company from declaring their intentions. Although they can stall and delay announcing for about a month they will have to publicly state they are trying to gain control.
An individual or a corporation could set up a new business entity for the sole purpose of acquiring a public company and then have the new company start buying the stock. Everyone would know that the new company was the purchaser, but few would know who was behind the new company.
This also assumes that the new company is buying outright rather than making tender offers contingent on getting a commitment for over 50% of the outstanding stock of the target firm.
In theory it can happen, but in practice it is almost impossible in the case of a company listed on a US stock exchange.
The SEC requires anyone who purchases more than either 5% or 10% of the stock of a public company from declaring their intentions. Although they can stall and delay announcing for about a month they will have to publicly state they are trying to gain control.
An individual or a corporation could set up a new business entity for the sole purpose of acquiring a public company and then have the new company start buying the stock. Everyone would know that the new company was the purchaser, but few would know who was behind the new company.
This also assumes that the new company is buying outright rather than making tender offers contingent on getting a commitment for over 50% of the outstanding stock of the target firm.
Hope this helps
Jerry-the-bookkeeper