The Construction of Squeeze-out System in the context of Voluntary Delisting
The squeeze-out system is not the deprivation of the equity of the remaining shareholders,but the conversion of the equity that has been reduced to property interests into the right to claim economic compensation,so it is fully in line with the provisions of the Constitution of China.The squeeze-out system can more accurately balance the conflict of interests between the controlling shareholder and the remaining shareholders and effectively solve the predicaments involving the remaining shares,so it should be introduced into Chinese law as soon as possible.It is advisable for China to introduce the squeeze-out system in privatization-oriented delisting by tender offers,and follow the"contingent relationship model"to identify squeeze-out as a special circumstance of privatization-oriented delisting.It is advisable to choose a more moderate"single proportion threshold"and set up differentiated thresholds of squeeze-out according to different situations of equity distribution.In a case of arm's length transaction,the pre-order tender offer price can be directly determined as the squeeze-out price.In a case of self-dealing,it is advisable to formulate a fair price guarantee mechanism that combines internal and external mechanisms from the perspective of holism.In view of the fact that the right to squeeze-out and the right to sell-out are a group of rights that mirror each other,the right to sell-out needs to be revised correspondingly after the introduction of the system of squeeze-out,.
PrivatizationDelistingSqueeze-outTender OfferThe Remaining Stockholders'Right to Sell-out
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