When a company hits Wall Street by initial public offering (IPO), it is usually seen as a sign of strength. But sometimes, firms go the opposite direction by taking the company private again. SpaceX and Tesla CEO Elon Musk plans to take Twitter private as part of his $44 billion acquisition of the company. Musk recently said he and the other investors are “overpaying” at $54.20 per share for the social media site, but touted the upside. And oil tycoon Harold Hamm this week agreed to buy out the company he founded, Continental Resources. Hamm has been vocal about his belief that it’s not the best time to be a publicly traded oil company. Here’s what happened when other high profile companies went private in this week’s Five for Friday.
#5. Dell Computers
Dell computers are everywhere. And back in the ’90s when the personal computer was going mainstream, Dell computers were highly coveted. Founded in Michael Dell’s garage, the company sold products directly to consumers. But the market quickly became saturated with competitors, which forced Dell to attempt to diversify. In 2013, the company went private in a leveraged buyout for $24.9 billion. The PC market eventually turned around and Dell went public again in 2018. Dell is still the third largest PC maker behind Lenovo and HP, and just ahead of Apple.
#4. Reader’s Digest
Until 2009, Reader’s Digest was the best selling magazine in the United States. The company went public in 1990 but agreed to a $1.6 billion buyout in 2006, which put it back into private hands. The pint-sized periodical celebrated its 100-year anniversary this year and now falls under the umbrella of Trusted Media Brands, which includes Taste of Home, Family Handyman and Birds and Blooms.
#3. Hilton Hotels
The world’s third largest hotel chain Hilton was taken private by Blackstone in 2007, which made the private equity behemoth the world’s largest hotel operation with holdings of La Quinta Inn and Suites and LXR Hotels and Resorts. Blackstone eventually divested and Hilton went public once again in 2013. As part of that IPO, the company made $2.3 billion, the most ever raised by a hotel chain.
#2. Burger King
America’s fifth largest fast food chain Burger King has been doing the public-private dance for years. Burger King raised $425 million in a 2006 IPO but went private again in 2010 when it was bought for $3.3 billion. It traded private for public one more time in 2012. Burger King is now part of Restaurant Brands International, which formed when BK merged with Canadian donut and coffee chain Tim Hortons. RBI also owns Popeyes, which was part of the great Chicken Sandwich Wars of 2019.
#1. Toys R Us
In a time when toy stores dotted the great American landscape, Toys R Us was possibly the biggest name in the business. It was the store to get the hottest toys of the 80s and 90s, like Tickle Me Elmo and Furby. After being public for more than 25 years, Toys R Us was taken private when acquired for $6.6 billion in 2005. The pressure of e-commerce was too much, though, and it filed for bankruptcy in 2017 with nearly $8 billion in debt. There is a comeback in the works with hundreds of Macy’s stores hosting Toys R Us pop-ups this holiday season.
