The company is deciding between:
Selling the business via a Management Buyout (MBO), or
Selling to an external private equity (PE) buyer.
From the original company’s viewpoint, an advantage of an MBO is:
The buyers are the existing management team. Relationships already exist, and there’s usually more trust and alignment.
Post-divestment, the original company may still trade with the divested unit (e.g., as a supplier or customer). Cooperation tends to be better with a familiar internal team than with an external PE house whose primary focus is financial returns.
Why the others are wrong:
B. Enhanced big data opportunities – unrelated to the divestment method.
C. Improved relationships with MBO team in the event of a sale to PE – logically inconsistent; if sold to PE, it’s not an MBO.
D. Higher price due to synergistic benefits – PE typically looks for financial engineering and operational improvements, not classic corporate synergies. You are more likely to see synergy premia when selling to a trade buyer, not in an MBO.
So the key pro-MBO argument here is better cooperation post divestment → A.
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