If I have 50 shares in company A (worth $20 a share) and company B (worth $400 a share) comes along and purchases Company A, what happens to my 50 shares?
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The situation in the UK is similar - to 'squeeze-out' (i.e. compulsorily purchase the shares of) minority shareholders the 'Company B' in this example would need to own both 90% of the shares by value and 90% of the voting rights of Company A. Source: legislation.gov.uk/ukpga/2006/46/part/28/chapter/3/crossheading/…– happyskepticCommented Aug 27, 2014 at 19:37
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1 Answer
If company B buys company A, then it buys your shares in company A. That's what it means to buy a company -- you buy all of its shares. If your shares are actually worth $20, then you get $1,000. But they may offer more or less than $20 per share. It's also very common for purchasers to offer their own shares instead of cash, or a mixture of cash and shares. It's generally all-or-nothing -- if more than a certain percentage (usually 50%) of shareholders vote to accept the offer, then the remaining shareholders must also sell their shares on the same terms, and if the offer gets less votes than are required than the potential purchaser doesn't buy any shares.
answered Jul 28, 2011 at 21:00
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4Mostly correct. For remaining (minority) shareholders to be forced to tender their shares in a buyout, the threshold is typically higher than 50%. For instance, in Delaware and New York, it's 90%. Look up "squeeze out" en.wikipedia.org/wiki/Squeeze_out Commented Jul 28, 2011 at 23:58
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how does it work out when the individual share holder does not take any active action for the shares he holds at a stock trading company (dealers)? lets say especially when the company is no longer listed on stock exchange -- does he get his shares converted into liquid money and deposited into account automatically or he gets bartered with the buying company's shares? Commented Oct 23, 2015 at 20:47
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@NikhilMulley move your comment into a new followup question. Commented Nov 4, 2015 at 16:38