Series 79 practice questioneasyGoing-Private Transactions
Which of the following is an example of an affiliate transaction that could trigger Rule 13e-3 in a going-private deal?
- AAn acquisition of a public company by a non-affiliated third-party
- BAn open-market stock repurchase by the company
- CA controlling shareholder buying the remaining public float✓ Correct answer
- DA merger involving two unrelated public companies
Explanation
Why C — A controlling shareholder buying the remaining public float
A controlling shareholder buying out public shareholders is an affiliate transaction under Rule 13e-3. The trap is assuming only company-initiated actions are covered.
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