The court had made an order for the purchase of a minority shareholding after finding prejudicial behaviour by the majority. It now considered valuation of the shares in a 49.96% shareholding. The question was whether the valuation should be discounted to reflect the fact that they were part of a minority shareholding.
Held: It was proper to apply a discount: ‘A minority shareholding, even one where the extent of the minority is as slight as in this case, is to be valued for what it is, a minority shareholding, unless there is some good reason to attribute to it a pro-rata share of the overall value of the company. Short of a quasi-partnership or some other exceptional circumstance, there is no reason to accord to it a quality which it lacks. ‘
Judges:
Blackburne J
Citations:
[2006] EWHC 583 (Ch), Times 21-Apr-2006
Links:
Statutes:
Jurisdiction:
England and Wales
Citing:
Cited – In re Bird Precision Bellows Ltd ChD 1984
The court considered the method of valuation of a minority shareholding in a forced purchase by the other shareholders. Nourse J said: ‘I would expect that in a majority of cases where purchase orders are made under section 75 in relation to . .
Cited – Strahan v Wilcock CA 19-Jan-2006
The court considered the valuation of minority shares in an order for their purchase: ‘Shares are generally ordered to be purchased on the basis of their valuation on a non-discounted basis where the party against whom the order is made has acted in . .
Cited – CVC/Opportunity Equity Partners Limited and Opportunity Invest II Limited v Luis Roberto Demarco Almeida PC 21-Mar-2002
(Cayman Islands) The respondent was a minority shareholder. An offer was made to buy out his interest. He petitioned for the winding up of the company on the just and equitable ground. The claimants obtained an injunction to prevent him doing so, . .
Lists of cited by and citing cases may be incomplete.
Company
Updated: 01 July 2022; Ref: scu.239281
