Definition
A minority squeeze-out is the legal mechanism that converts the remaining public minority into cash after an acquirer gains control. Typical paths:
- Short-form merger under Delaware §253 — available when controller owns ≥90%
- Medium-form merger under Delaware §251(h) — immediately following a successful tender, no separate vote required
- Long-form merger with shareholder vote — used when the above thresholds aren’t met
Minority protections
- Appraisal rights — minorities who oppose the squeeze-out can demand judicial determination of “fair value”
- Disclosure — Schedule 13E-3 filing required if the controller is taking the company private
- Fiduciary duties — controlling parties owe entire-fairness duties unless MFW conditions are met
Why it matters
The squeeze-out is what completes the acquisition. Without it, a successful tender leaves the bidder with public-minority overhead and ongoing minority rights.