Sell-out right Clause Samples
A sell-out right clause grants a minority shareholder the ability to compel the majority shareholder to purchase their shares under certain conditions, typically when a majority sale or change of control occurs. In practice, this clause is triggered if the majority shareholder decides to sell their stake to a third party, allowing minority shareholders to exit on similar terms. The core function of the sell-out right is to protect minority shareholders from being left in an unfavorable position or with diminished influence after a major ownership change, ensuring they have a fair opportunity to liquidate their investment.
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Sell-out right. Holders of securities conferring (potential) voting rights may require an offeror who, acting alone or in concert, following a takeover bid, owns 95 per cent. of the voting capital or 95 per cent. of the securities conferring voting rights in a public company to buy their securities at the price of the bid, upon the condition that the offeror has acquired, through the bid, securities representing at least 90 per cent. of the voting capital subject to the takeover bid. Again, the 95 per cent. ownership would be contrary to the free float requirement discussed in Public takeover bids above.