There was a lot of talk in 2016 about Donald Trump’s hostile takeover of the Republican Party, but I wrote at the time that in business terms, the transaction was more like a reverse merger.
Maybe you’re unfamiliar with this particular bit of legal, yet slightly sketchy, legerdemain. A privately owned business wants to sell shares to the public but for whatever reason wishes to avoid the close scrutiny of an initial public offering.
So the business owner finds a near-dead company that is already public, buys it for a song, grafts the private enterprise into the hollow public shell and — voila! — the deed is done. One of my favorite examples involved CoolBrands, which once gave the world such frozen treats as Eskimo Pies and the Chipwich. After the yummy product lines were sold to other companies, only the shell remained on the stock market. A private maker of cleaning products snapped it up, and in a twinkling it was public, selling grill degreasers instead of ice cream.
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