With effect from 2014, the conditions for forcing out minority shareholders (‘squeeze-out’) will change. All of our clients considering the squeeze-out are advised to use the currently applicable laws to implement this process.
In simplified terms, under Czech law, majority shareholders holding shares representing at least 90% of the nominal value of all shares issued by the company are allowed to concentrate ownership, i.e. acquire 100% control over the company. This process is subject to one important condition – minority shareholders must be provided with reasonable compensation determined based on a valuation opinion by an independent expert.
As a result of the changes effective from 2014, the portfolio of entities entitled to ensure the payment of compensation to shareholders will be reduced. The new act will impose an obligation to provide documentation to minority shareholders free of charge, and an obligation to pay additional settlement to all squeezed-out shareholders even if an out-of-court agreement for a higher consideration is made with some of the shareholders (and the agreement must be published).
RSM CZ has prepared dozens of fairness opinions on the consideration proposed for payment to minority shareholders. In preparing the opinions for this purpose, we always emphasise the sound reasoning behind our conclusions so that the results ascertained in the opinions sufficiently substantiate the reasonableness of the price for the shares held by minority shareholders.
We would be happy to discuss your questions regarding valuation issues related to squeeze-outs.
For more information please contact us.