Vol. 548 No. 2
92 Mr. Deasy asked the Tánaiste and Minister for Enterprise, Trade and Employment if it was obligatory for shareholders of a company (details supplied) to sell their shares to another company when they took over that company; and if she will make a statement on the matter. [4093/02]
Company law has been drafted in a way which seeks to both protect the interests of minority investors and which also encourages economic activity. Section 8(3) of the Irish Takeover Panel Act 1997 requires the panel to make rules providing that where a person or persons acting in concert acquire effective control of a company, i.e., where they control not less than 30% of the company's voting rights, the person or persons in control are required to make an offer for all the remaining shares of the company on certain terms. The purpose of this is to protect minority shareholders so that they do not get locked into holding shares in a company, the effective control of which is exercised by another party.
Under section 204 of the Companies Act 1963, a company that receives acceptance of an offer to acquire 80% of another company's share capital is empowered to acquire the shares of the remaining shareholders. There is an option for such minority shareholders to make an appeal to the courts against any such mandatory acquisition of shares. The rationale behind this compulsory acquisition provision is that it is often not an attractive proposition for a purchasing company to acquire less than 100% of the share capital of another company and acquisition schemes, which are economically desirable might not proceed if this provision did not exist. Accordingly, it will be seen that there is a sensitive balancing of interests to be achieved which in any one case may not satisfy all the parties concerned.
