Under what condition can an offeror squeeze out remaining shareholders?

An offeror can squeeze out remaining shareholders when they hold at least 90% of the shares in a company, which allows them to initiate a process known as "squeeze-out" or "compulsory acquisition." This process enables the majority shareholder to acquire the shares of minority shareholders and effectively eliminate them from the company, ensuring that the offeror can have full control without the need for consensus from the remaining minority shareholders.

In many jurisdictions, the threshold of 90% ownership is significant because it typically aligns with regulations that dictate the ability to enforce such actions. For example, this high ownership percentage reduces the potential for disruption or dissent among shareholders, as the offeror essentially represents the interests of the overwhelming majority of shareholders.

Achieving this level of ownership generally reflects a controlling interest, which provides the necessary leverage to compel minority shareholders to sell their stakes, often at a fair valuation process as determined by the offeror or through appraisal by an independent party. This mechanism ensures that minority shareholders are compensated for their shares, even if they do not wish to sell, thus streamlining corporate reorganization or consolidation efforts.