Yes, though an EOT is typically least likely to sell. When an ESOP company receives a legitimate offer that is at a substantial premium, the board must pass the offer on to the trustee, who ultimately decides to sell, or not. In a worker co-op, the workers decide for themselves.
The feasibility of future saleability of an EO company is dependent on how the original owner embeds their views towards it within the governance documents, bylaws, and the chosen EO structure. Some structures make it easier to prevent future resale while others maintain a neutral or financially driven stance towards a future resale.
If an EO company gets a buyout offer, at a bare minimum, the board needs to assess if the offer is legitimate and if it is equal or above their most recent appraisal. How they respond to the offer will vary based on
- type of EO company and
- individual structure of the EO company.
When an ESOP company receives such an offer, the board, after its due diligence, must involve the trustee in the negotiation process. The trustee acts as a separate party to the deal representing the interests of the ESOP which may be the owner of all or some of the allocated and unallocated shares. From a fiduciary perspective, the ESOP trustee can only consider factors such as the net sale proceeds of the transaction, ensure adequate price protection in stock deals, and ensure they get a favorable fairness opinion from a financial advisor. Trustees cannot consider what might happen to the employees post-sale as part of their decision. Also, unless special provisions were put in place at the establishment of the ESOP, the voting rights of an ESOP mirror those of common shareholders.
If an EOT company receives such an offer, how it is handled will be determined by the trust document. If it was the selling owner's vision to maintain EO in perpetuity, then the trust document would provide assurance that the selling owner's vision for the business can be retained for the long term. At the same time, even so-defined in perpetuity EOT's don’t have to last forever either. EOT's allow the selling owner to specify the precise conditions under which a sale of the business would be permitted and how the proceeds should be distributed, e.g., to the employee-owners or charity, or otherwise. In plain terms, with an EOT, a business owner can customize when, how, and under what terms they would want to allow for the company to be sold.
For the same offer, a worker co-op is somewhere inbetween an ESOP and EOT, as the employee owners will create a legal document, e.g., bylaws, in which their governing body (typically a board of directors) will define for themselves under what conditions a sale (i.e., demutualization) could occur.