Sell-out right
The right provides a possible exit after a qualifying control transaction and is initiated by the minority holder rather than by the acquirer. Its availability, thresholds, price basis, time limits and procedures depend on the applicable legal framework. It does not mean every minority shareholder can demand a sale at any preferred price whenever a controlling holder exists. Distinguish it from the acquirer’s squeeze-out mechanism and from voluntarily accepting an offer. Analysis must consider the actual transaction and current safeguards rather than rely on the general label.
Worked example
A remaining holder checks whether the completed bid meets the conditions for requiring the acquirer to buy its shares. It follows the prescribed process rather than assuming an ordinary market sale is the same legal right.
Common mistake
Saying sell-out means a majority owner forces a minority to sell, or assuming the minority can choose any price.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Supporting | September 2026–June 2027 |