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CS Executive · Company Law and Practice · Members and Shareholders

Under Section 235, Zenith Ltd (transferee) made an offer to buy all shares of Orion Ltd. Zenith already held some Orion shares at the date of the offer. Holders of 92% in value of the shares whose transfer is involved, excluding Zenith's own holding, approved within four months. What may Zenith do about a dissenting shareholder?

Zenith may give notice to the dissenting shareholder within two months after the four-month period ends, because approval by nine-tenths in value of the shares involved, excluding Zenith's own holding, has been obtained. The threshold is not 95%, and notice cannot be skipped or delayed indefinitely.

  1. ANothing, as approval of at least 95% is needed
  2. BWithin two months after the four months expire, give notice that it desires to acquire the dissenter's sharesCorrect
  3. CAcquire the shares immediately without notice
  4. DGive notice at any time later, with no time limit

Explanation

Section 235(1) requires approval by holders of not less than nine-tenths in value of the shares involved, excluding those already held by the transferee or its nominee. 92% exceeds 90%, so the condition is met. Notice must be given within two months after the four months expire. The 95% option is wrong; the Act says nine-tenths.

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