Understanding the term PTOP (Public-to-Private)

PTOP (Public-To-Private) is the term used to describe transactions involving the takeover of a listed company by private investors. The aim of these transactions is to take public companies private, enabling them to benefit in the short term from the advantages of a private structure, such as confidentiality and decision-making flexibility.

A PTOP transaction can take several forms, including a public tender offer, a convertible bond purchase or a direct shareholder purchase. Once the transaction is completed, the company goes private and is no longer listed on the stock exchange.

The aim of a PTOP transaction is usually to improve the medium- to long-term performance of the target company, by focusing on a longer-term strategy and putting in place special measures to exploit the potential of assets and operations. Private investors can be more aggressive in restructuring and reorganizations, which can improve the company's profitability, while shareholders benefit from a premium payment.

A PTOP transaction can only be carried out with the support of the company's shareholders. Shareholders are invited to vote to buy back their shares at a price defined by the private investors, and the outcome of the vote is decisive for the PTOP transaction to go ahead.