Taking a company private is when a company buys back all the publicly traded shares, so that one can no longer purchase shares in the company on a publicly traded market. Usually a company doesn't have enough cash to accomplish this, so they take on additional debt or outside investment to afford buying all of the publicly available shares.

> Taking a company private is when a company buys back all the publicly traded shares,

That is not correct, unless the second company is different from the first.

Thanks. So why didn't it happen at market price? How do you set a price if the shares are public?

The price is typically set at a premium over the market price in order to persuade existing shareholders to tender their shares to you.

As for what happens to holdouts that e.g. do not think the price is high enough, their situation is explained by: http://www.investopedia.com/ask/answers/06/rejecttenderoffer...

You set a price high enough and make an offer to all the shareholders, who might or might not want to sell to you at that price. And then there are complex rules about how many of them have to accept and what happens to those who didn't want to sell.

There are usually shareholder agreements in place that not every single shareholder has to agree to a acquisition. Otherwise, you'd never be able to acquire a company if just one shareholder, holding one unit of stock said "no".

I think in most jurisdictions there is a law that enables a supermajority shareholder to take possession by a forced buy-out of remaining stock, at a "fair price". Thus a separate shareholder agreement is not necessarily required.

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This comment makes no sense at all. Dole didn't offered anything! In case someone may be getting confused about the process: Murdock (who happened to be Dole's chairman and CEO) offered $12 in June (when the stock was trading at $10.20) for the shares he didn't control already. He raised his offer to $13.50 in August.

Is this then the logical/extreme conclusion of share buybacks programs?

No. That was a misunderstanding. Share buyback is just an alternative to paying out dividends.

Here's the official word on it : https://www.sec.gov/answers/gopriv.htm

The part that is usually not explained is that there are state-by-state, and company-by-company, mechanisms to compel the left-over minority of shareholders who do not exchange their shares to be "squeezed-out" and paid the same cash value everyone else got. After this all of the shares are held by the private owner and the security is delisted/unregistered from the public markets

Going public means public offering, that anyone can buy its stock at the stock exchange. Taking a company private is the inverse of that: the company is no longer traded at the stock exchange.

Typical, but not the only scenarios are a management buy-out and a private entity offering to buy all stock. To make this work, it is usually necessary to offer a premium price.

You offer a price to all the public share holders and if they agree you buy up all the shares.

You buy all the shares available from the market so that you own the entire company.