CMB Raises The Squeeze-Out Threshold

On 12 November 2014, the Capital Market Board (CMB) issued a new Communiqué on Squeeze-out and Sell-out Rights Serial No. II-27.2 (Squeeze-out Communiqué) and replaced the previous squeeze-out regime introduced on July 2014. The new piece of legislation seems like an effort from the CMB to respond to criticism by the investors on squeeze-out prices. The CMB also seems willing to prevent more entities getting delisted by squeeze-out in an effort to preserve the Borsa Istanbul A.Ş.'s (BIST) value, ahead of its anticipated public offering. Since July 2014, squeeze-out procedures have been initiated for at least four entities listed on the BIST (e.g. PTOFS, TEBNK, ALNTF, MUTLU).

The most important change is the gradual increase in the required shareholding for triggering the squeeze-out right for controlling shareholders and the sell-out right for minority shareholders; 95% until the end of 2014, 97% until the end of 2017 and 98% from 1 January 2018 and onwards. Note