Hostile takeover of microcap target on the public equities market

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June 12, 2021

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Florida, USA

Does anyone have experience buying public securities of a target in order to gain control, delist it, and fix it? Obviously there are significant securities regulations to be mindful of, so we intend to engage legal counsel ASAP, but I'm more interested in learning about the specific mechanics of how this is done. Target is traded on public markets with $10M market cap and needs fixing.

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Reply by a searcher
from University of California, Berkeley in San Francisco, CA, USA
First: https://www.law.cornell.edu/cfr/text/17/240.13d-1, then you can consider buying shares on the open market or make a tender offer to the Board.
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Reply by a searcher
from INSEAD in Madrid, España
I think the main obstacles will be volume and ownership concentration. Usually the % of free float in these companies is not very high. You will need to directly negotiate with one/some of the meaningful investors before starting any action.
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