| Commentary

146 ‘Pure’ management buy-outs

| Commentary

146 ‘Pure’ management buy-outs

In the case of a simple management buy-out, the existing management team, or some of it, acquires a controlling stake in the business even though the managers may only put up a relatively small part of the funding. An institution may take a minority stake and a bank may provide loan finance. In such management buy-outs, the managers and their advisers would usually take the lead role in negotiating the purchase of the business from the sellers and would negotiate separately with the providers of finance. The buy-out would usually be effected through the medium of

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