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Going Public/Going Private

A panel of family business owners and experts recently met in Europe to discuss the pros and cons of public ownership. The key comments follow: 

  • Managing two types of shareholders – permanent and temporary shareholders – is very difficult. They want different information; they have different levels of understanding; they have different emotional perspectives.
  • Laws in most countries concerning minority shareholders’ rights discourage going public. (The laws were characterized as “the power to blackmail the majority owner.”) 
  • In England, with the elimination of the death tax, more and more family companies are taking themselves private.
  • The difficult market for attracting and retaining key people is making stock options and public ownership more tempting – purely to compete in the market for talent.

It’s an increasingly tough decision.

 

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