A squeeze-out is a mandatory share sale procedure: the holder of a dominant control block (95% or more) has the right to buy out the shares of all other shareholders. Since 1 January 2023 the procedure has been governed by Article 95 of the new Law of Ukraine "On Joint-Stock Companies" No. 2465-IX. The buyout price is the central — and most vulnerable — issue of the entire procedure, and it is determined by an independent valuation.
How the procedure works (Article 95)
The holder of the dominant block submits a public irrevocable demand to acquire the shares of all shareholders. Settlements run through an escrow account with a bank — guaranteeing that minority shareholders receive their money.
Why the valuation is the key element
The law derives the mandatory sale price from the highest price paid for the company's shares and the market value determined by a valuation entity. The Supreme Court has developed important case law: the buyout price must be not merely market-based but fair — and may exceed the market value, since the minority shareholder's property is taken without their consent.
This yields a simple practical rule: a weak valuation is the main ground for minority shareholders to challenge the entire procedure. A strong report, by contrast, protects the majority shareholder: a substantiated fair value removes the arguments about price suppression.
How we determine the fair value of shares
- analysis of the company's financial position and prospects;
- application of valuation approaches with a substantiated choice (income, asset-based, market — where market data exists);
- correct treatment of the valuation date;
- substantiated limits on block discounts and premiums — reflecting the Supreme Court's case law on fair pricing.
Timing and documents
The squeeze-out procedure runs on strict statutory deadlines (the public demand is filed within 90 days of the notification of acquiring the dominant block), so the valuation is planned in advance. Required: the company's financial statements, the shareholder register, information on previous share transactions.
The Kanzas company has 20+ years of experience valuing shares and corporate rights — from individual blocks to integral property complexes. We offer a substantiated fair value that withstands challenge, timelines aligned with the procedure's schedule, and an individual approach. Write to us by email or messenger to discuss your procedure.
FAQ
Who commissions the squeeze-out valuation? As a rule, the holder of the dominant block (the demand's initiator).
Can a minority shareholder challenge the price? Yes — which is exactly why the quality of substantiation is critical.
How does "fair" value differ from market value? Under Supreme Court case law it may be higher: the compulsory nature of the sale is taken into account.
