Important changes for public companies, including a new three-month limit on squeeze-outs and reverse squeeze-outs, came into force on 13 January 2009.
The key changes are:
- imposing a three-month limit on exercise of the squeeze-out right from the date the 90% threshold is exceeded or, where the threshold was already exceeded when the change came into effect, within three months of 13 January 2007. The squeeze out right is available to shareholders in public companies holding at least 90% of the votes in general meeting either on their own or with others under the same control or acting in concert
- imposing a similar three-month limit on the right of minority shareholders in public companies to require their shares to be acquired by a shareholder with a squeeze-out right. Again, the three-months runs from the date the 90% threshold is exceeded or, where it was already exceeded when the change came into effect, within three months of 13 January 2007
- the price per share payable on a squeeze-out or reverse squeeze-out may not be lower than either the average market price over the three-months and six-month periods before the right is exercised or than the highest price paid by the shareholder with the squeeze-out right (or by others under the same control or acting in concert) within 12 months before the right is exercised
- any shareholder acquiring or losing a squeeze-out right in a public company must immediately notify the Financial Supervision Commission and the company.
There are also changes to the requirements for shareholders exceeding 66% of the voting rights in a public company to make a compulsory tender offer, to the minimum tender offer price and to the sanctions for failing to announce a tender.
Law: amendment to the Act on Public Offering, Conditions Governing the Introduction of Financial Instruments to Organized Trading and Public Companies dated 29th July 2005
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The original publication date for this article was 22/01/2009.