Family Business Quarterly
For successful family businesses, there is invariably a time when an outside company comes along with an attractive offer to acquire the business. At that point, the owners face some of the most excruciating decisions anyone can confront.
Two executives who dealt with such situations–Ernest Henderson III, formerly of the Sheraton Corp., and Alexander M. Levine, formerly of Webster Spring–re-lived their experiences at a recent Executive Breakfast of Northeastern University’s Center for Family Business.
Henderson recounted how he finally decided to accept an offer to sell the family-owned hotel chain he headed to ITT. Ultimately, he concluded that he should accept the attractive buy-out offer in the interests of family owners who weren’t active in the business. “Holding together the company would have meant freezing the inheritances of all these people. Did I have the right to freeze the inheritances of these other people? I finally decided I did not have that right.”
For Levine, who operated a successful manufacturing business together with his brother-in-law, the offer by a competitor to buy the business late in the 1980s represented a way out of an ongoing internal buy-out struggle.