Going Private Transaction

This situation is similar to merger arbitrage, only that the target company is getting taken private by its management and/or major shareholders. The acquirers buy out the remaining minority and remain owners of the firm.

This is a popular special situation among US-listed Chinese companies – you can find our deep dive HERE.

More or less the same aspects apply with the going-private transactions as with the merger arbitrage (see above). One particular difference that should be noted here is that with US-listed Chinese transactions, it is very important to check what type of proposal is on the table – definitive agreements usually indicate a very high chance of success, while non-binding/preliminary offers include a much higher risk (termination, prolonged timeline, etc.).