Squeeze-out right
The mechanism can help an acquirer complete ownership after a sufficiently supported takeover, but it is not a right possessed by any simple majority at any time. The relevant thresholds, acceptance or holding basis, time limits, notice, consideration and challenge procedures depend on the applicable law. It differs from a sell-out right initiated by a minority holder. Establish the transaction’s scope and the current rules before evaluating the effect on remaining investors; ownership percentage alone without its legal basis is insufficient.
Worked example
After an offer, an acquirer examines whether the required statutory acceptance and other conditions are met before sending compulsory-acquisition notices. A bare statement that it holds a majority does not settle the question.
Common mistake
Treating any majority holding as an unrestricted right to force out minorities or confusing it with a minority-initiated sell-out.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | AFM | Supporting | September 2026–June 2027 |