Three 11.. Erik Lidman - Lektor vid Göteborgs universitet.questions 22.. Kevin Ewerlöf - Associate vid Mannheimer Swartling.regarding the valuation of minority shares connected to the new directive on cross-border conversions, mergers and divisions: appraising the ‘shares or the company’, minority discounts and illiquidity discounts
In this article, we discuss three questions connected to the appraisal remedy in the new EU-directive on cross-border conversions, mergers and divisions (see article 86i, 126a and 160i in [EU] 2019/2121), which dictates that member states should provide shareholders who has voted against the approval of a cross-border operation (such as a merger) to have the right to exit the company and receive cash compensation for their shares that is equivalent to the value of those shares. First, should the market value of the minority shares or the value of the corporation serve as basis for the calculation of a fair cash compensation awarded to the shareholders who voted against an approval of a cross-border operation? Second, should a fair cash compensation include a minority discount (or control premium)? And third, should a fair cash compensation include an illiquidity discount? We discuss these questions and the valuation effects of how they are answered by comparing the appraisal remedy in Delaware corporate law with the regulation on compulsory share redemption (‘inlösen av minoritetsaktier’) in Swedish law. Our findings are that the directive allows both the market value of the minority shares and the value of the corporation to serve as basis for calculating a fair cash compensation and that it will be up to the national competent authorities to make this choice at present, and also that the answers to the second and third question will follow from this choice.
In this article, we discuss three questions connected to the appraisal remedy in the new EU-directive on cross-border conversions, mergers and divisions (see article 86i, 126a and 160i in [EU] 2019/2121), which dictates that member states should provide shareholders who has voted against the approval of a cross-border operation (such as a merger) to have the right to exit the company and receive cash compensation for their shares that is equivalent to the value of those shares. First, should the market value of the minority shares or the value of the corporation serve as basis for the calculation of a fair cash compensation awarded to the shareholders who voted against an approval of a cross-border operation? Second, should a fair cash compensation include a minority discount (or control premium)? And third, should a fair cash compensation include an illiquidity discount? We discuss these questions and the valuation effects of how they are answered by comparing the appraisal remedy in Delaware corporate law with the regulation on compulsory share redemption (‘inlösen av minoritetsaktier’) in Swedish law. Our findings are that the directive allows both the market value of the minority shares and the value of the corporation to serve as basis for calculating a fair cash compensation and that it will be up to the national competent authorities to make this choice at present, and also that the answers to the second and third question will follow from this choice.
Inledning
Senast den 31 januari 2023 ska Europaparlamentets och rådets direktiv (EU) 2019/2121 vad gäller gränsöverskridande ombildningar, fusioner och delningar 33. Europaparlamentets och rådets direktiv (EU) 2019/2121 av den 27 november 2019 om ändring av direktiv (EU) 2017/1132 vad gäller gränsöverskridande ombildn ...