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Definition

The forced acquisition of minority shares by a majority of more than 90% of the shareholders of a company. In terms of section 124 of the Companies Act (71 of 2008), where an acquiring company obtains 90% or more of the issued share capital of another company they can force the remaining minority shareholders to sell their shares for the same price as the majority sold for. This is also known as a "squeeze out". Two months notice of the squeeze out must be given to the minority dissenting shareholders within four months of the original offer. After such notice, the offeror can ask the court to oblige the minority shareholders to accept the deal. Squeeze outs are a fairly common feature of takeovers, and they are rarely contested.

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