Companies Act 2014 section 1162

Purchase of minority shares

Section 1162 deals with the right of minority shareholders to require successor companies to buy their shares for cash when a company undergoes a division.

• Shareholders who voted against the division resolution, or minority shareholders in a transferor company where a successor already holds 90% or more of voting shares, may request that their shares be purchased for cash within 15 days of the relevant date.
• Successor companies must purchase the shares at a price based on the share exchange ratio in the common draft terms of division, and the acquired shares are treated as treasury shares.
• This buy-out right does not apply where shares in each successor company are allocated to shareholders of the transferor company in proportion to their existing rights in its capital.
• The court retains full power to make any order necessary to protect the interests of a dissenting minority in any company involved in the division.

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