Booyah Breakdown: Ticker Ditchers

And 2007 is expected to be just as hot.

In fact, it already is. Just this week, two Australian companies, Rio Tinto (RTP Quote) and BHP Billiton (BHP Quote) were rumored to be working on separate $40 billion offers to acquire Alcoa (AA Quote). And last week, Four Seasons Hotels (FS Quote) agreed to a $3.8 billion buyout deal from a group led by its chief executive.

And there's more to come. Wall Street speculates that companies like Texas Instruments (TXN Quote), Dell (DELL Quote) and even Home Depot (HD Quote) might be taken private as well.

But can this boom last? How do shareholders fare in these deals? And why would a company want to go private in the first place? Those were just some of the questions that you asked, so the Booyah Breakdown is going to answer them now!

Privacy, Please

When a company's board of directors decides to put itself up for sale, it doesn't necessarily seek out private-equity firms.

The board's sole responsibility is to get shareholders the best deal. "So whether another public company buys them or a private-equity firm comes in, the bottom line is getting shareholders the most value," says Barsky.

But thanks to a successful track record and a recent influx of cash from pension and endowment funds, private-equity firms, such as Warburg Pincus, Blackstone Group and Kohlberg Kravis Roberts, have money to burn. So they can afford to pay top dollar.