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Home > Resources > ESOP > Must an ESOP Company Respond to an Offer to Purchase?

Must an ESOP Company Respond to an Offer to Purchase?

July 28, 2020 by Employee Benefits Law Group

An ESOP company needs to understand what it should do if an offer to purchase is made. Watch our video to learn more about having the proper procedures in place.

 

Transcript

This is a very dynamic and evolving area of the law involving ESOPs. Suffice to say that a board of directors of a corporation should have procedures in place by which they will evaluate whether or not an overture to purchase a company or to merge with another company is analyzed as being a serious credible offer that the board needs to present to the shareholders for approval. On the other hand, a trustee might also be the recipient of an overture because the trustee holds stock in the corporation.

There are no black and white answers to this question, unfortunately, but the key is to have procedures in place and be able to deal with the type of offer that comes in with the right parties responding and the proper parties analyzing to determine what’s best for all the shareholders of the corporation and what’s the most prudent investment for the ESOP. 

Filed Under: ESOP

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EDITOR’S NOTE: We did the best we could to make sure the information and advice in this article were current as of the date of posting to the web site. Because the laws and the government’s rules are changing all the time, you should check with us if you are unsure whether this material is still current. Of course, none of our articles are meant to serve as specific legal advice to you. If you would like that, please call us at (916) 357-5660.

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