I own a few shares in some large publicly-traded US company. This company gets acquired and "goes private". Am I required to give up my shares in the acquisition? What if, for whatever reason, I don't want to cooperate? Are my shares still worth anything? Do I still get dividends? What is the law on this?
I have some shares in this process at the moment, in the UK. "Required" is the word the registrar used, as in I'll be required to sell assuming the vote goes the way it's expected to. In practice that means I'll receive a cheque at some point, and won't have to do anything except pay it in.
My shares are held electronically, and they have all my details up to date so it's easy, and there are no certificates that I could refuse to send.
It's also handy for me, as I wanted to get rid of them anyway (but it wasn't worth the hassle of doing it since my online broker ceased to exist, and they're not worth much).
While the other answers are correct, they perhaps don't address the mechanism - i.e. answer the question "I owned 0.01% of this company - how can I suddenly own 0%?".
In most takeovers the target's shares are (at the end of the process) either 100% owned by the acquirer (an "acquisition") or are merged with those of the acquirer so they no longer exist (a true "merger").
Mergers are easier to understand: in general the corporate law of the jurisdiction provides that on a vote of the target's shareholders (normally by supermajority) the owners of the target's shares receive in substitution for those shares whatever is offered in the relevant offering document (normally cash or shares in the acquirer, but occasionally deferred consideration, loan notes or similar). In jurisdictions (eg England and Wales) which do not support "native" mergers, a similar effect can be achieved through a court sanctioned process (here a "scheme of arrangement") where a court will, after a vote and having determined the arrangement is fair, change the legal interest of the target's shareholders into something else (eg cash).
In an acquisition, things are more complicated. Often a "tender offer" is made first, whereby the acquirer makes an open offer for shares in the acquirer. At some point by corporate law or by the rules of the market on which the shares are listed, they are forced to make an offer for all the shares, in order to protect the rights of minority shareholders (in a private company environment this is called a "tag along" provision). Equally once they have achieved a greater percentage of ownership, they can compulsorily purchase the remainder (in a private company environment called a "drag along" provision), i.e. treat a small minority as having accepted the offer. The mechanism to enforce this can vary between jurisdictions - for instance it can be a provision in the relevant statute law, or the listing rules of the market may require such provisions be incorporate into the company's articles of association or equivalent (i.e. the legal rules specific to that company on how it operates).
The net result is that ownership of shares in a company (especially one traded on a public market) does not give you unfettered ownership in that company - that ownership is subject to a set of rules "for the greater good" which are designed both to protect minority shareholders, but also stop them from being obstructive (eg holding a tiny minority of shares to prevent a full acquisition), with those rights being mediated by shareholder votes (often requiring supermajorities).
tl;dr -- In the U.S., each share becomes equivalent to a large final dividend amount (for valuation purposes, but not for tax purposes).
In the United States, here is a common scenario for how a company that goes private treats non-cooperative shareholders:
- The deal is approved by the board.
- The deal is approved by shareholder vote.
- If needed, any government approvals are obtained.
- The deal closes. Often this involves all of the company's assets being given to the now private company, in exchange for cash equivalents, bonds, and/or stock.
- Cooperating shareholders receive their promised payment (in cash equivalents, bonds, and/or stock) in exchange for their shares. In some cases, the promised payment is broken out into a final dividend and a residual purchase amount.
- Non-cooperating shareholders may keep their shares but not get paid yet.
- Ordinary dividends cease. (Especially if the formerly public company no longer owns an ongoing business to fund them.)
- The newly private company's finance and accounting departments take over the jobs that were formerly handled by the formerly public company's finance and accounting departments.
- The non-cooperating shareholders may sell, bequeathe, or assign their unredeemed shares in the formerly public company (subject to any applicable restrictions), but the shares are likely to stop being traded on exchanges after a very short time period.
- Owners of such unredeemed shares may redeem their shares to the successor company (acting on behalf or in lieu of the former company). Typically, the successor company will pay the deal's cash amount per share. But other provisions might be made (as part of the deal) for what would have been bond or stock amounts per share.