A Complete Guide to Navigating Shareholder Exit Options

Investing in a company can be really rewarding but unfortunately circumstances change, and shareholders may find themselves needing an exit strategy. Luckily, shareholders do have several options to consider when looking to sell their ownership in a company. Below we have provided a brief overview of common exit options available to shareholders in the UK.

Selling Shares

One of the simplest ways to exit a company is by selling your shares. If the company is publicly traded, you can sell your shares on stock exchanges. For smaller privately held companies, finding a buyer might involve personal negotiations and arrangements through private markets.

Here at JWR, we are able to market your business for you taking advantage of our corporate finance network and experience in this area.

Company Buyout

In some cases, the company’s existing management team might decide they would like to run the show and arrange to buy out the shareholders. This is known as a management buyout (MBO). The management team can pool resources or seek external funding to purchase the shares from investors.

Acquisition or Merger

When another company expresses interest in buying the company you’ve invested in, you might have an opportunity to find the exit. This can happen through acquisitions or mergers, where shareholders may receive compensation in the form of cash, shares in the acquiring company, or a combination of both.

Share Buybacks

Companies may choose to buy back their own shares from shareholders. This can be a way to provide shareholders with an exit route while also adjusting the company’s ownership structure.

Which option is best for me?

As you can see, there are several options that require careful consideration before you decide which exit route is best for you. Whether it’s selling shares, participating in a buyout, or going through a merger or acquisition, each exit option has its advantages and challenges. You also have both the company’s financial health and your own personal objectives to consider. This is why consulting with financial and legal professionals, such as ourselves, can assist you in making an informed decision that truly aligns with your goals.

Do not hesitate to contact us at Johnson Wood Roach for more information surrounding these options; we would be happy to assist you in your shareholder journey.

Shareholder Exit Options for Businesses

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JWR are a three director, progressive, modern and friendly firm of Chartered Accountants and Chartered Tax Advisors based in south east Hampshire. Trading since 1992, we have built a reputation for client care and ‘out of the box’ solutions.

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