In the wake of corporate scandals, Sarbanes-Oxley, the availability of capital for equity investments, and the difficulty making long-term decisions on  quarterly basis, quite a few large public companies are going private.  This has been a trend for two or three years now, so it is no longer front page news.  The size of the deals is making front page newss. 

Recently, we talked about the bid to take TXU private.  That effort is ongoing, although the Texas legislature may get involved in that deal and make it unattractive to the planned purchaser.  Today, another $20+ billion deal to go private was announced.  This time, Alltel (the fifth largest wireless company in the US) would go private.  Click here for more details about the Alltel.  Major restaurant chains, automobile manufacturers, and some airlines have gone or contemplated going private as well. 

The prediction was that compliance with Sarbanes-Oxley would cost $1 billion for a large company.  The reality is that it may be costing far more than that.  The Act and the austerity measures implemented to ensure compliance with Sarbanes-Oxley have led many people to leave the corporate environment, either voluntarily or otherwise.

 

Filed by Coleen Davis at 6:00 am under Business Trends, Current Events, Solving Problems