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IPO, Merger, Acquisition

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Kudler is a gourmet/fine foods store which is a privately held company that wants to expand its operations. Kudler has three options for expansion; IPO, merge with another organization, or acquire another company in the same industry.

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What threats are associated with each option (IPO, merger, acquisition)?

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Solution Summary

Kudler is a gourmet/fine foods store which is a privately held company that wants to expand its operations. Kudler has three options for expansion; IPO, merge with another organization, or acquire another company in the same industry.

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Let us take each option one by one.

The major threat associated with IPO is that owners of the company will dilute their stake in their company or reduce their holdings by selling their shares to public and institutional investors, thereby losing some control over the company. They will also have to become answerable for each action affecting the company to the shareholders and investors of the company. Further, public company have to face stringent regulations pertaining to ...

Solution provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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