From time to time, a company, fund, or rich person announces that they are willing to buy a big share of the stocks of a company with the intent of taking it out of the stock market. What does this mean for you as a minor investor?
Each national market has its own rules, but most of them have laws that force the buyer of a significant amount of the shares to offer a fair price to all the owners who are willing to sell. This is known as a takeover bid. In the UK, this offer should be active at least 21 days, and it is compulsory when the buyer is going to acquire more than 30 percent of the voting rights of the company that they are buying.
In most cases, if your stock is going to be taken out of the stock market, accepting that price and selling is the most sensible decision.
If you want, you have the right to keep your shares and not sell them; but once the shares are out of the market, they will be very difficult to sell. Being a minor investor, this means that you will have some shares without the liquidity to sell them easily and without the decision power in the company’s strategies. Of course, this is different when your share of the company is significant and you have decision power or at least the power to influence the decisions.
Back to the minor investor’s point of view, when the shares are out of the market, you will need an agency or institution to keep record of your shares which means extra costs for something that will be difficult to sell.
Besides, if the buyer acquits 90 percent of the shares and voting rights of the company, he can send compulsory purchase notices.
Conclusion
Is most cases the easiest decision is just to sell the shares and accept the price offered. If you really do not want to do it, you may want to hire a lawyer to check your options.
If you inherit unlisted companies, you will need a Shares and Assets Valuation (SAV) service.