Is there any reason for the buyer here who already owns almost 80% of the company to offer a 67% premium for the remaining 20% of the shares? What would have happened if they offered a 30% premium or a 15% one (from what I understand, they have both simple majority and qualified majority so that means they don't really need to ask anyone for anything). It's not like they want to get 100% ownership since this is a purely voluntary buy-out and existing investors can choose to stay.
SUSE to go private
81–90 of 245 posts
Re: SUSE to go private
#82I am cautiously optimistic. From the article: > Both SUSE’s Management and Supervisory Boards have expressed support for the strategic opportunity presented by this delisting. They believe that it will enable SUSE to concentrate on its operational priorities and the execution of its long-term strategy without the pressure of public markets. Lets hope their incentives more strongly align with their customers, now. I a…
I used to run SUSE about 20 years ago and have always thought it was cool but haven't kept up with it much since then. What are some of the things they do that make them unparalleled?
I ran SUSE around the same time (2001-2002ish), because it was the only major distro (between RH and Mandrake, primarily) that would install on my archaic 128MB PII. Debian worked but my grade school brain had no capacity for setting up Xfree86 manually. I stuck to SUSE for about 1.5 years before switching to Mandrake (and, eventually, Fedora Core) on my new Athlon XP desktop.
My nostalgia for them will probably always be strong.
Re: SUSE to go private
#83I don’t know why I read it this way, but I read “go private” as “closed source”. After reading, SUSE is no longer going to be a public company.
same I had no idea they were publicly traded.
Re: SUSE to go private
#84I am cautiously optimistic. From the article: > Both SUSE’s Management and Supervisory Boards have expressed support for the strategic opportunity presented by this delisting. They believe that it will enable SUSE to concentrate on its operational priorities and the execution of its long-term strategy without the pressure of public markets. Lets hope their incentives more strongly align with their customers, now. I a…
I used to run SUSE about 20 years ago and have always thought it was cool but haven't kept up with it much since then. What are some of the things they do that make them unparalleled?
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Re: SUSE to go private
#85What are the success stories of private equity firms taking over a corporation? (Where success is the products are still made, quality and staffing is maintained at previous levels)
Berkshire Hathaway is basically a publicly traded private equity firm.
Re: SUSE to go private
#86Earlier quoted context omitted.
Debian is great indeed (I am a a Debian developer myself although rather inactive) - but today’s news isn’t much of a change in whether SUSE is or isn’t on any definition of the dark side. Why do I say that? Simply, as per the linked announcement itself, this takeover offer is by the current majority shareholder who already owns 79% of the company. They can already win any shareholder vote they want to win. They alre…
> pay the current minority shareholders of SUSE 67% more than their shares are worth on the open market For anyone who paid the IPO price of 30 EUR (and it went up to 40 in the months after the IPO), it would mean a realization of their losses. You'd be forced out of your position, down 46% compared to the IPO price. The PE firm probably gave a large chunk to banks at discount prices to facilitate the IPO, but still,…
Their ultimate goal is to sell at a profit. IPO is staggered not to sink prices. But apparently there was not enough appetite for more than 20%. So, so far a failure for the PE.
Usually fund strategy calls for an exit in 5y. If after 5 years they don’t see a good enough return, they need to change strategies. Delisting helps do major surgery in the shadows (labour), and broker a deal that either makes them money or allows them to save face…
My guess is as someone said, reduce costs, implement some income boosting measure, touch up the numbers and sell it privately. Expect a lot of this for half-IPOed PE tech acquisitions made the past 4 years as they realize they will be holding the candle forever, since they bought at peak prices.
Re: SUSE to go private
#87Is there any reason for the buyer here who already owns almost 80% of the company to offer a 67% premium for the remaining 20% of the shares? What would have happened if they offered a 30% premium or a 15% one (from what I understand, they have both simple majority and qualified majority so that means they don't really need to ask anyone for anything). It's not like they want to get 100% ownership since this is a pur…
It's probably a question of who exactly holds that other 20% of shares... There's a decent chance it's mostly held by one or a few long-time investors/contributors/??? and the premium is the price of good-will.
Re: SUSE to go private
#88Is there any reason for the buyer here who already owns almost 80% of the company to offer a 67% premium for the remaining 20% of the shares? What would have happened if they offered a 30% premium or a 15% one (from what I understand, they have both simple majority and qualified majority so that means they don't really need to ask anyone for anything). It's not like they want to get 100% ownership since this is a pur…
My knowledge on this is limited, and US-specific, but I'd imagine the situation in Europe is similar... In the US, publicly traded companies are subject to a lot of laws that private companies aren't subject to, most notably being required to make periodic public disclosures about finances and (to a more limited extent) business plans. Making false statements on these required disclosures is a crime, even if not intentional. The majority stakeholder might've done the math and realized that it's cheaper to buy out the other shareholders than it is to continue making those disclosures and risking criminal prosecution.
Re: SUSE to go private
#89Start of the end, private equity ruins everything it touches. RIP SUSE
Private companies funded by public funds is my jam. So, most of the tech megacorps in the US. Oh, the glory of fasc...ehem, capitalism.
Fascism is when I can’t make rules about how other people spend their money. Hilarious when people associate capitalism with a movement founded by none other than Benito Mussolini. If you read the fascist manifesto and the Green Party platform back to back you’d think they came from the same book.
Re: SUSE to go private
#90Is there any reason for the buyer here who already owns almost 80% of the company to offer a 67% premium for the remaining 20% of the shares? What would have happened if they offered a 30% premium or a 15% one (from what I understand, they have both simple majority and qualified majority so that means they don't really need to ask anyone for anything). It's not like they want to get 100% ownership since this is a pur…
My guess is that they personally prefer to own 100%, but for various reasons around who specifically owns the remaining shares (e.g. senior employees or friendly firms) they don't want to force them to sell.
So they instead offer a large premium and hope/assume those parties will accept.