Public company trying to become privately held

[Guest Degrandville]

Beside 1042 treatment, is there any other benefits using an ESOP to make the tender offer?

[QDROphile]

If you are doing this sort of deal, it is crawling with high priced experts who know the facts and should have considered various options. They would be the best resource for open ended questions. If you don't have high priced experts crawling all over the transaction, you should not be trying to evaluate the transaction or options with the assistance of this forum. Despite participation of some very good experts, it is an inadequate resource for the complex task.

[Guest eafredel]

Another potential benefit of using an ESOP in this situation would be that amounts paid by a corporation to redeem its own stock are not tax deductible while amounts contributed to an ESOP (and used to buy stock from a third party) are tax deductible. This may mean that financing of the tender offer might be available on better terms or that it may improve corporate cash flows. There are both positives and negatives to using an ESOP as a tool of corporate finance. To evaluate this issue, it is necessary to understand why the company does not want to be a public company, why the outside shareholders do not want to sell, and how an ESOP might address these issues.