THE COMPULSORY SALE OF THE SHARES AT THE REQUEST OF THE MAJORITY SHAREHOLDER UNDER THE NEW RULES

Abstract

The article analyzes a new tool of the minority during the squeeze-out procedure – a competing bid (offer), which was introduced by the new Law of Ukraine «On Joint Stock Companies» dated July 27, 2022 No. 2465-IX (hereinafter – Law No. 2465) and corresponds to the objectives of the Association agreement between the European Union and European Atomic Energy Community and their member states, of the one part, and Ukraine, of the other part on the adaption of national legislation to EU legislation in the field of corporate governance. It is indicated that the competing bid is an opportunity for the minority shareholder(s) to overcome a public takeover bid of the shareholder(s) who owns a dominant controlling stake. The conditions of its use in Ukraine are also given. The experience of applying a competing bid in European countries is presented. In addition to the advantages, the disadvantages of legal regulation of the application mechanism of the competing bid are also given, in particular among them: 1) the possibility of simultaneous submission of competing offers by shareholders who do not act together; 2) a short deadline for submitting a competitive offer; 3) there is a high probability that the minority does not have the funds to buy back shares from the majority. In order for this tool to work, it is necessary to improve Article 96 of Law No. 2465, at the same time, the development of judicial practice can help in this.