Squeeze-out

Aiming to become the global leader in chip-scale photonic solutions by deploying Optical Interposer technology to enable the seamless integration of electronics and photonics for a broad range of vertical market applications

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Andrea Koch

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Squeeze-out

posted on May 13, 2014 04:52AM

Those of us who want to see how a buy-out – better: squeeze-out – works, should watch Volkswagen today – see e.g. http://www.4-traders.com/VOLKSWAGEN-AG-436737/news/Volkswagen--declares-the-offer-for-Scania-unconditional-and-will-acquire-all-tendered-shares-18426885/.

Volkswagen wanted to gain 100 % control over Scania, a Swedish lorry manufacturer. So they made an offer of SEK 200 per share to the Scania shareholders. Today Volkswagen announced that enough Scania shareholders accepted this offer voluntarily and Volkswagen now owns 90.47 % of the shares. This number is very important, because it exceeds the magic limit of 90 %.

Beyond this 90 % limit the major shareholder can drive all other shareholders out of the company ("squeeze-out"). Volkswagen announced that they extended their offer until May 16th, so the remaining shareholders will be able to accept it and cash in the SEK 200 per share.

After that, Volkwagen will "initiate compulsory acquisition of the remaining shares in Scania as well as promote a delisting of Scania’s shares from NASDAQ OMX Stockholm."

What does this have to do with POET Technologies? Well, unless an acquirer owns 90 % of all shares in POET Technologies, he will not be able to forcefully tear your shares out of your hands. In other words: As long as more than 10 % of the shareholders refuse to accept, we are safe from a low-ball offer. In still other words: Whoever wants 100 % control over POET must make an offer that is attractive enough to make at least 90 % of the shareholders sell.