The French Financial Market Authority (the Autorité des Marchés Financiers or AMF) recently approved an additional delisting procedure available to controlling shareholders of public corporations.
The new mechanism allows a shareholder holding more than 90% of the voting rights of a corporation listed either on Euronext Paris or Alternext Paris to take its subsidiary private, subject only to the following requirements:
- The total value traded in the subsidiary’s stocks must be less than 0.5% of its market capitalization over the 12 months preceding the filing of the delisting application; and
- The controlling shareholder must file with the AMF a simplified buyout offer at a fair price to allow the minority shareholders to exit before its delisting.
Following the delisting, the controlling shareholder remains subject to the below requirements:
- It must offer a liquidity to the remaining minority shareholders at the offer price for a period of three months starting on the closing date of the acceptance period of the buy-out offer; and
- It must not change the corporate form of its subsidiary for a transitional period of one financial year.
The new rules offer an interesting alternative to the French squeeze-out procedure currently in force that is conditioned on the controlling shareholder holding more than 95% of the shares and voting rights of the listed entity–a threshold higher than in most EU jurisdictions where the squeeze-out is usually possible with 90% of the voting rights.
The new mechanism does not replace the squeeze-out procedure, though, as it does not allow the controlling shareholder to force the minority shareholders out of the corporation.