On 21 July 2012, the law on squeeze out and sell out of securities issued by companies currently or formerly admitted to trading on a regulated market or which were the object of a public offer (the “Law”) was adopted. This Law will enter into force on the 1st day of the 3rd month following its publication in the Luxembourg Official Gazette (which occurred on 27 July 2012).

Outside the context of a takeover bid (within the meaning of the Luxembourg law of 19 May 2006 on takeover bids) the Law allows:

• majority shareholders (holding alone or in concert, directly or indirectly, at least 95% of the share capital and voting rights of the concerned company) to squeeze out minority shareholders, i.e. force minority shareholders to sell their securities (being transferable securities having voting rights, including representative certificates), or
• minority shareholders to sell out their securities to the majority shareholders, i.e. force majority shareholders to acquire their securities.

Under inter alia the following conditions:

• being a majority / minority shareholder of a company which has its registered office in Luxembourg, 
• which securities, having voting rights, are admitted to trading or were removed from trading less than five years ago on an European regulated market,
• and which were the object of a public offer which started less than five years ago.

The squeeze respective sell out follows a strict procedure whereby the CSSF (being the Luxembourg Financial Supervisory Authority) - at a very first stage - will need to be informed accordingly and provided with independent valuation reports of the securities in question.

For Luxembourg this new Law provides for the very first time legally
possible ways for squeeze respective sell out processes.