Where a majority shareholder wishes to buy-out all outstanding shares in a subsidiary and an agreement with the minority shareholders cannot be reached thereon (for example, when not all shareholders have accepted a public offer), the majority shareholder initiates the buy-out procedure by sending a letter to the target company’s board requesting that the dispute be resolved by arbitrators.
Arbitral tribunal.
The arbitral tribunal consists of three arbitrators. The majority shareholder appoints one shareholder and the minority shareholders (normally represented by a trustee appointed by the Swedish Companies Registration Office in a buy-out procedure following a public offer on a listed company) appoint one arbitrator. The two arbitrators appoint the third arbitrator and chairman of the arbitral tribunal. Advance vesting of title to the shares.
Where there is a dispute regarding the amount of the purchase price, the majority shareholder may request advance vesting of title to the minority shareholders’ shares, which will be granted in a separate award if:
o the parties agree on the existence of a right to compulsory acquisition or it is otherwise clear that such a right exists; and
o the majority shareholder provides satisfactory security for the future purchase price of the shares, including interest.
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