Private Equity Newsletter
What Every Investor Should Know Before Acquiring a Large Stake in a Public Company

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Private equity funds, hedge funds and other investors should consider a variety of legal issues before acquiring a large equity position in a public company, to avoid some looming pitfalls down the road. These issues have never been more relevant than today. Depending on the level of ownership, the investment intent and other circumstances, the acquisition of a large stake in a public company may trigger a number of legal obligations, consequences and/or restrictions on future investment activity under federal or state law or the target’s corporate documents, particularly if the investor has an activist agenda. An outline of these issues follows.