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The board of directors may assist a management. Employee buyout in either a privately negotiated sale or private auction of the company. Private sale: o In a private sale, the board can control virtually all aspects of the transaction. The board can negotiate with management regarding the terms and conditions of the sale. Additionally, the board can divest the company to raise Dominican Republic Phone Number the necessary financing to implement an MBO. This can done entirely at the expense of the seller. The board’s control of a private sale  however, limit  its financing sources and.  The need to protect the interest of minority shareholders.

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Conduct the sale through an auction yet still support an MBO as one of the bidders. The company can assist the MBO by using corporate funds to help fund the management’s retention of expert advisors. It can also give management complete access to company books, records, and advisors. This offers the seller an additional bidder with certain competitive advantages and may result in the seller getting a higher price for the company than it might otherwise have obtained. Where the company is in distress, this often assures the seller of having at least one non-liquidation bidder for the company.

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A management-initiated buyout is typically initiated by senior management and can be supported by the board and owners of the company, even to the extent of providing corporate funds to conduct such an effort. Third-Party-Initiated Buyout: o Any prospective bidder for a company can integrate the management into the overall ownership structure of the transaction. Such an effort can reap the various advantages associated with MBOs noted above and therefore enhance its competitiveness. However, strategic buyers are generally not willing to provide management with.

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