Replies to post #61878 on Copper King Mining Corporation fka CPRKQ

[Trav G]

That is a good question. Anyone? Im not sure a company can force you to sell

[AllyAustin]

Hi and Happy Easter, Svalente!

I just read your questions about going private and wanted to weigh in. As I understand it, there are typically 4 ways a public company goes private. A cash out merger - this is a management buyout where the shareholders of the existing public company receive cash. A tender offer - where there is a public offer to buy all of the shares of the existing public company for a fixed amount of cash which is the same for all shareholders. A sale of all - selling all of a company’s assets to a newly-formed private company owned by some of the company’s management team, followed by the public company’s dissolution and distribution of the net sales proceeds to its stockholders. A reverse stock split - minority stockholders are left with only fractional shares created in the transaction, which are then purchased for cash by the issuer.

If they do decide to go private, first they will need to bring the shareholder count to less than 300. The negative is that often cash poor companies don't have the money or the financing options available to them to reduce the number of public shareholders to below 300. This is often accomplished by a reverse stock split and the payment of cash to the holders of fractional shares created in the transaction. In this case of going private (with a reverse split to take us below 300 beneficial shareholders), it would benefit only the very largest shareholders.

[richard the Realtor]

Going Private
A publicly held company is potentially eligible to convert to exclusively private ownership when it reduces the number of its shareholders to fewer than 300. Depending on the facts and circumstances, the company may no longer be required to file reports with the SEC once the shareholder total drops below 300.

A number of transactions can result in a company converting to private ownership, including:

Another company or individual makes a tender offer to buy all or most of the company’s publicly held shares;

The company merges with or sells the company’s assets to another company; or

The company can declare a reverse stock split that not only reduces the number of shares but also reduces the number of shareholders. In this type of reverse stock split, the company typically gives shareholders a single new share in exchange for a block—10, 100, or even 1,000 shares—of the old shares. If a shareholder does not have a sufficient number of old shares to exchange for new shares, the company will usually pay the shareholder cash based on the current market price of the company’s stock.
If the transaction is initiated by an affiliate (an insider) of the company, or the company could be deemed to be making an acquisition of its own shares Rule 13e-3 of the Securities Exchange Act of 1934 requires the affiliate and/or the company to file a Schedule 13E-3 with the SEC. When Rule 13e-3 applies, the company is said to be “going private” under SEC rules. While SEC rules don't prevent companies from going private, they do require companies to provide information to shareholders about the transaction that caused the company to go private. The company also may have to file a merger proxy statement or a tender offer document with the SEC.

The filing of a Schedule 13E-3 is also required when issuer-initiated or affiliated transactions result in a company’s publicly held securities no longer being traded on a national securities exchange or an inter-dealer quotation system, such as Nasdaq.

The Schedule 13E-3 requires a discussion of the purposes of the transaction, any alternatives that the company considered, and whether the transaction is fair to all shareholders. The Schedule also discloses whether and why any of its directors disagreed with the transaction or abstained from voting on the transaction and whether a majority of directors who are not company employees approved the transaction.

Going private transactions require shareholders to make difficult decisions. To protect shareholders, some states have adopted corporate takeover statutes that provide shareholders with dissenter's rights. These statutes provide shareholders the opportunity to sell their shares on the terms offered, to challenge the transaction in court, or to hold on to the shares. Once the transaction is concluded, remaining shareholders may find it very difficult to sell their retained shares because of a limited trading market.

http://www.sec.gov/answers/gopriv.htm