When managers first began to buy back the stock of their publicly traded companies and take them private in the early 1970s, their shareholders cried that such “management buyouts” were freezing them out at bargain basement prices. As time passed, and as shareholders began to join in the spoils of what became intense bidding wars (in which the value of their shares could rise as much as 50% or even 100% almost overnight), their hue and cry turned to applause.
A version of this article appeared in the January 1986 issue of Harvard Business Review.
