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Comment by buzer | Hacker News Reader

In Finland if someone controls over 90% of the shares they have right to forcefully buy rest of the shares (and also obligation if someone wants to sell at at that point). So if they wanted to go fully own the company they need to high enough offer that they will at least hit 90%. I'm not sure if you could from public company to private without all shareholders agreeing to it as that would benefit large shareholder at minority holders cost.

No clue if there are similar laws in Germany or other countries.

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Interesting; if someone does this, do they have to pay a premium at all, or are they able to buy them at the exact current market rate? Also is this just for publicly traded companies or private ones as well? At least in the US, my understanding is that private companies set the "fair market value" of their shares themselves, so I'd be worried that someone could purposely set the price low to be able to buy them out more cheaply.

There is redemption committee in Finland Chamber of Commerce that will assign a arbitration court to handle the redemption. They will also assign a trustee who will represent the minority shareholders.

The valuation is decided during the arbitration process. From what I understand if there has been previous offer to buy it's quite likely that will be used at least as initial basis for the price.

There seems to be at least one English article about the process: https://insights.fondia.com/fi/en/articles/corporate-law/sha...

Thanks for the info! I'll take a look

For me in the US, it’s a strange notion that you could compel someone to buy the last 10% of the company. That does not always seem possible. What happens if you literally can’t do it? That’s probably rare, but if 90% of the company is most of your assets, and you’ve somehow borrowed against it already, it could be almost literally impossible.

In Italy you are actually compelled to do a "residual buy" if you own 90% of the company.

This is supposed to protect small investors from finding themselves owning shares they can't sell on the market anymore.

The price is set by the equivalent of the SEC.

If that fails to buy all the shares, the company must sell enough stock so that the market is again liquid enough.

I _think_ many countries have similar rules, as cursory googling shows the London stock Exchange changed their minimum free float requirement some years ago.

In worst case if someone is demanding it and it went through the arbitration process (and possibly appeals) it would be the same as any other debt. If the shareholder is a company the debtor could initiate the bankruptcy procedures. Of course it's possible that they could end up not getting full amount (if anything) from the estate if there are more debts than what assets were worth.

If they are private person they can attempt to judgement via court and let enforcement authority liquidate their assets or garnish their wages.

You can always choose to keep your share (slightly) under 90% to prevent such rules from triggering, so I don't see a problem with them.

Read it carefully, they have the right but not the obligation to buy the remaining stake so this is not applicable at all.

They do have obligation to buy if the minority shareholders demand it. If they don't want to trigger the requirement they need to keep their ownership under 90%.

There's also requirement (with some exceptions) to make offer to buy publicly listed company's shares when the shareholder's control over the votes increases above 30% and 50%. Normally the price in that case would be the highest price that shareholder paid for the shares during previous 6 months.

In germany it's similiar, but 95%. That might explain the high premium

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