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Hi guys,
I do understand the management buy out & buy in concept but the only thing I can’t quite get my head around is: Why do we care about who buys the company once its sold?
Suppose we have a firm then the management takes it over why do we care if they do well or bad if it doesn’t affect our finances. Most questions talk about the company doing well with a fresh pair of eyes (which makes sense but it doesn’t affect us after its sold).
From the material provided by the Kaplan only thing I can relate to is the pro/cons during the sale.
Can anyone enlighten me if I am missing something, thanks in advance.
I think it depends on your current position in case you are intending to acquire a company. If you were outside managements, you would consider MBI way. Whilst, if you were currently an management in the company, you would consider MBO. As such, in this case, you will concern about ‘who buy’ as it is your position and several pro/ cons associated with.
But if we are in the owner’s perspective, I guess we will care about the bidding price between MBO and MBI. As well its potential growth after being sold to look back the bidding price whether it worth.
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