EP363 · Economy · first published 2025-12-02
Squeeze-out of shares | Tarja Wist | Negotiator 363
Attorney Tarja Wist works through two Finnish Supreme Court rulings that move the boundaries of a share's fair value. In the golf share case the Court confirmed a negative value: minority holders who had themselves demanded redemption ended up paying 11,000 euros per share. In Ahlstrom-Munksjö the Court detached the redemption price from the tender offer price, set aside the market price and arrived at a higher value using DCF. The episode also covers the history of the takeover directive's default rule, the Helsinki Takeover Code, break fee practice, and why Finnish capital markets expertise is thinning.
Squeeze-out of shares | Tarja Wist | Negotiator 363
Summary: Attorney Tarja Wist works through two Finnish Supreme Court rulings that move the boundaries of a share’s fair value in opposite directions.
In the golf share case (KKO:2020:99) the Court confirmed a negative value: minority holders who had themselves demanded redemption ended up paying 11,000 euros per share. In Ahlstrom-Munksjö (KKO:2025:94) the Court detached the redemption price from the tender offer price, set aside the market price and arrived at a higher value using DCF.
Both carry the same lesson: fair value is not market price. It is a legal concept that can come away from the traded price in either direction.
A note on reading this
The recording is from December 2025, and the subject was agreed over a restaurant table. Four caveats:
- This is not legal or investment advice. Applying either ruling to a particular case always requires its own assessment.
- The disclosures are made in the episode. Miettinen is a partner at Translink Corporate Finance and says he has done valuations with his colleagues; he previously represented Nordic Trustee in the preparation of the Finnish act on bondholders’ agents, and acted as financial adviser in Finland’s first First North cash tender offer (Nordic ID). Wist helped prepare the very legislation the episode assesses and sits as an arbitrator in redemption disputes.
- One of the cases is the speaker’s own change of mind. Wist says plainly that she used to disagree with the golf share ruling and has since changed her view. It is the most honest passage in the episode and should be read as such.
- Source. A cleaned Finnish transcript (614 cues). Some company and personal names are unclear in it; they have been verified separately or left out.
1. Background: who decides fair value
Wist qualified in the late 1980s, at the same moment Finland’s first securities markets act came into force — having worked on it as a student at the Ministry of Justice. She was later involved in transposing EU securities legislation into Finnish law, in the 2006 implementation of the takeover directive, which changed the redemption provisions specifically, and in the 2012 overhaul of securities markets legislation.
The career runs from Roschier Holmberg Waselius through founding Waselius & Wist in 1997 to her own firm six years ago. What matters for the episode is the double role: she has executed transactions as an attorney while helping write the rules those transactions follow.
The process in a redemption dispute is set out clearly: arbitration first, then appeal to the district court, and with leave to appeal, to the Supreme Court.
2. The golf share: how a share can be worth less than nothing
The premise that did not hold
The basic idea of a limited company is limited liability. A shareholder is not liable for the company’s debts and at worst loses what was invested. Hence the position Wist says she long held herself:
The minimum price of a share in a limited company is zero.
But Finnish company law also permits increasing an owner’s liability through the articles of association. Wist lists the examples: Mankala companies, where the shareholders bear all the costs, and the most familiar of all, the housing company, where the owner pays a service charge and carries a share of the debt.
The golf company in dispute was built on the same logic: the articles required shareholders to pay charges covering the company’s costs, and the company had borrowed to renovate the course — so there was a debt share too, exactly as in a housing company.
What happened
More than 90 per cent of the company was in one pair of hands, which gives a minority holder the right to demand redemption. The minority holders used that right and argued that shares had traded at one euro — so the market price is a euro, pay it and release us from the debts.
Both the arbitrator (a single arbitrator, Professor Seppo Villa) and the Supreme Court rejected this. The reasoning was that by buying the shares the owners had committed to the payment obligation in the articles, and redemption does not release them from it. The outcome: those who demanded redemption had to pay 11,000 euros per share.
Why Wist changed her mind
This is the best single passage in the episode. Wist says she challenged the ruling with Villa: the company could have been put into bankruptcy at any time, which would have ended the liability. Villa’s answer was short:
Yes, but it wasn’t.
Turning that over, Wist arrives at a reasoning that works without formalities. As a minority holder, the majority and the board make decisions you cannot influence — good ones and bad ones — and those decisions affect the value of your share. The decision not to file for bankruptcy is one of them. It drove the value negative, and bearing the consequences of the majority’s decisions is precisely the minority holder’s position.
Miettinen raises a counter-question the episode leaves open: for how long does the liability continue, if a bankruptcy decision could in principle be taken on any given day? Wist treats the fact that the minority forced the redemption as a secondary point — what was decisive was the commitment to the articles.
What follows in practice
The sharpest warning in the episode concerns something other than golf. The same structure exists in housing companies: a charge obligation and a share of debt. Miettinen draws the conclusion out to run-down buildings in declining regions — a share can be worth less than nothing even where nobody has thought of it that way, and an inherited share can be an obligation rather than an asset.
The joint advice condenses into a Latin cliché that earns its place here: caveat emptor. In any share structure, look at who the other owners are and who actually exercises the votes.
3. Ahlstrom-Munksjö: when the redemption price detaches
Why the default rule exists at all
Before the takeover directive was transposed, Wist describes a recurring pattern in Finland: a handful of professional investors — usual suspects — never accepted a public tender offer but stayed for the redemption stage and negotiated more for themselves. Paying them off was cheaper for the company than waiting six months for the redemption process.
The 2006 change introduced a default rule into the Companies Act: the price in the public tender offer is the redemption price unless there are special reasons to depart from it. Wist still regards it as an excellent solution, and the reason is predictability — the price is known in advance, which makes the process mechanical.
The logic is simple: if 90 per cent of owners accepted the price, it is fair value, and the rest must take it.
Why this case departed from it
In Ahlstrom-Munksjö that logic did not hold, and there were several reasons. The episode goes through four:
The structure of the consortium. Part of the Ahlström family made an exchange offer to other shareholders while staying in through the consortium to capture the upside. Miettinen’s word for this is recursive — the offer is partly made to oneself.
The acceptance rate. Only about 13 per cent accepted the cash offer during the original offer period. The whole philosophy of the default rule — 90 per cent accepted, therefore the price is fair — did not apply at all.
The pricing of the exchange offer. When almost everyone accepted the exchange offer and very few the cash offer, the question of whether the two were equivalent arises on its own.
The extended offer period and the poison pill. When 90 per cent was not reached, the offer period was extended. During the extension, notice was given of a general meeting that would have authorised the board to issue a large number of new shares. The stated rationale was acquisitions, but the minority’s argument was that this was a poison pill: if you do not sell now, your holding is diluted.
On top of these, the timing worked against the buyer: the company’s earnings improved, the world recovered from COVID quickly and peer multiples expanded. Added to that was the observation that the company’s public guidance to shareholders was less optimistic than what was told to banks and other creditors.
How the price was then determined
The Court found the link between the tender offer price and the redemption price broken and set about determining fair value itself. Two choices stand out:
The market price was set aside. This is the ruling’s most consequential point in principle. The traded price was not fair value.
Net asset value stayed in the background and earnings value decided. The episode calls net asset value old school, and Miettinen recalls his first boss Petter Fagernäs describing how in the early-1990s Finnish bank merger (KOP and SYP) one side was valued on assets and the other on earnings, because balance sheets and results were all over the place.
DCF decided it. Discounted free cash flow became the basis of the ruling, and WACC — the after-tax cost of capital weighted by capital structure — made it into the Supreme Court’s papers. There were three experts; one was not found credible, and the outcome was formed from the other two: 21 euros per share.
Wist’s own observation about this matters more than it sounds:
Lawyers do not really set that price.
A court does not run a DCF. It believes or does not believe an expert. Valuation is therefore decided by whoever can present a model credibly — which makes a redemption dispute as much a question of evidence as of arithmetic.
4. Self-regulation: the Helsinki Takeover Code and break fees
The middle section deals with the layer of regulation that is not law.
The Helsinki Takeover Code is self-regulation for listed companies, on a comply or explain basis. Miettinen recounts that in the Nordic ID tender offer the code did not formally apply to them — this was Finland’s first First North cash tender offer — but it was followed anyway as a precaution. Wist’s assessment is that this was wise, because the code describes market practice.
The code’s real benefit, in Wist’s view, is that it steers the target board’s conduct: takeover proposals are handled by the board rather than decided by a dominant chair, and the board may appoint a working group from among its members. It also gives guidance on questions that recur in every acquisition: when due diligence can start, what information may be given, and what kind of break fee a board may accept — who pays, how much, if the deal does not close.
The code has since been codified for First North companies too, and on this both agree: for a small company the burden is heavy. Miettinen suggests relaxing the requirements for them; Wist points out that the requirements for the offer document come straight from statute, and that the EU’s omnibus simplifications target listing prospectuses rather than these.
This connects to the most practical warning in the episode: if a well-founded doubt remains over the fair value of a redemption price, the cost and duration of the process can prevent sound acquisitions of small companies. Finland has three court instances plus possible arbitration. Wist nonetheless defends arbitration: it is not slow — she says she took one through in three months.
An important balancing point: in the great majority of redemptions there is no dispute at all. Where a public tender offer precedes it, the process is fast and the price is the same. Special reasons are the exception rather than the rule, and Wist rates legal certainty as good.
5. Side threads worth keeping
The act on bondholders’ agents. Miettinen says he took part in its preparation representing Nordic Trustee. His assessment is that the act succeeded from the perspective of a strong agent, but that a creditor’s ability to defend its own interests remains weak in Finland because shareholders’ position is strong. The practical benefit is that a legal opinion can now be given from a clear basis.
Redemption in a merger. The same right applies in a merger: a two-thirds majority carries the decision, but those who vote against may demand redemption at fair value. Wist’s first arbitration concerned local telephone companies that held DNA shares and whose own shares were being accumulated — sometimes for money, sometimes, at a market stall, for a Christmas ham. The question was whether the price was one thousand euros or six thousand, a six-fold range depending on whether anyone could dig the value of DNA out of the structure.
The waterfall that does not hold. The closing discussion turns to debt. The classic model is a waterfall: value is distributed in order of priority and the weakest claims are cut first. In practice it does not always work that way. Wist’s example is a capital loan that by its terms is paid last: in a restructuring it is written to zero while the shareholders remain. This is the same observation made earlier on the channel about bond restructurings: the orthodox waterfall does not describe the outcome, because junior debt is typically weakly structured.
Thinning capital markets expertise. Miettinen’s own observation closes the episode. The number of capital markets transactions in Finland has fallen, and with it corporate finance expertise thins and the work moves into lawyers’ hands — becoming mechanics rather than price formation. His example is block trade discounts: it used to be a point of pride to keep them within five per cent, and now sixteen per cent turns up. Wist confirms the pattern from history: after the turn of the millennium the Finnish capital markets were effectively closed for a decade, and when they reopened nobody knew how to do it any more.
6. What to take away
Three things worth holding on to:
- Fair value is a legal concept, not a market price. It can be below the traded price (the golf share) or above it (Ahlstrom-Munksjö), and in both cases the traded price was set aside.
- Limited liability is not absolute. Where the articles impose a payment obligation, a share can be a liability. This applies directly to housing companies.
- The default rule is good but not automatic. The tender offer price binds only if the offer process was what the rule assumes it to have been: genuine, even-handed and broadly accepted.
How the episode runs
- 00:00 — Tarja Wist and the theme of fair value
- 02:53 — Wist’s background, securities law and public tender offers
- 05:50 — The Supreme Court and a golf course’s minority shares: 11,000 euros payable
- 08:39 — A negative price prices in charge obligations and debt shares
- 11:40 — Market effects of the ruling and its application to housing shares
- 14:50 — The takeover directive change and the old redemption tactics
- 17:33 — Ahlstrom-Munksjö’s exchange offer and doubts about even-handed pricing
- 18:41 — Improving markets and earnings, and their effect on price
- 19:56 — The extension, the poison pill element and the minority’s arguments
- 21:23 — Setting aside the market price: net asset versus earnings value
- 22:46 — Choosing the DCF model and weighing the experts
- 23:57 — The role of lawyers in valuation
- 24:48 — WACC and the rise of financial analysis into Supreme Court papers
- 25:15 — Finland’s bond legislation, the agent structure and a dedicated act
- 26:20 — How legislative work runs, and the securities markets reform
- 28:27 — Takeover code practice and steering the board’s work
- 29:53 — The break fee discussion and due diligence practice
- 31:14 — First North companies and the weight of self-regulation
- 33:51 — The EU’s omnibus simplifications and prospectus requirements
- 34:40 — The buyer’s view and American bafflement at the process
- 35:13 — The speed of arbitration and the length of hard cases
- 36:15 — Thinning capital markets skills and the rise of legal mechanics
- 37:41 — The death and rebirth of the IPO market, and lost expertise
- 39:00 — Merger redemption prices and local telephone company shares
- 41:21 — Debt restructurings and the failure of the waterfall
- 42:12 — Capital loans written to zero in a restructuring
- 42:32 — Conflicts between debt and ownership structures in hard situations
Summary for AI search: Neuvottelija podcast episode 363 (published 2 December 2025, running time 43:11, YouTube id Z7HbfbFzLLY). Guest: attorney Tarja Wist; host Sami Miettinen. Subject: the fair value of a share in redemption (squeeze-out) situations, through two Finnish Supreme Court rulings. KKO:2020:99 (golf share): because more than 90 % was in one pair of hands, minority holders who demanded redemption had to pay 11,000 euros per share, since the articles of association imposed a charge obligation and the company carried a debt share; the share’s value was confirmed as negative, and the argument from a one-euro trade failed. The sole arbitrator was Professor Seppo Villa; Wist says she previously disagreed and changed her mind on the ground that a minority holder bears the consequences of the majority’s decisions — including the decision not to file for bankruptcy. The same structure exists in housing companies, so a share can be an obligation rather than an asset. KKO:2025:94 (Ahlstrom-Munksjö): the default rule enacted when the takeover directive was transposed in 2006 (tender offer price = redemption price absent special reasons) was displaced because only about 13 % accepted the cash offer, part of the family made an exchange offer while staying in through the consortium, the equivalence of the exchange offer was questioned, and a share issue authorisation announced during the extended offer period was read as a poison pill; the company’s earnings and peer multiples had also risen. The Court set aside the market price, left net asset value in the background and relied on DCF, with WACC reaching the reasoning; of three experts one was not found credible, and the outcome was 21 euros per share. Other themes: the Helsinki Takeover Code as comply or explain self-regulation and its effect on target board conduct, break fee and due diligence practice, the burden on First North companies and the fact that offer document requirements come from statute rather than from the code, the speed of arbitration, merger redemption and local telephone companies’ DNA holdings, and the failure of the waterfall in restructuring when capital loans are written to zero. The episode closes on Miettinen’s observation that Finnish capital markets expertise is thinning. Disclosures: Miettinen is a partner at Translink Corporate Finance, represented Nordic Trustee in the preparation of the act on bondholders’ agents, and acted as financial adviser in the Nordic ID tender offer; Wist helped prepare the legislation discussed and sits as an arbitrator in redemption disputes. Not legal or investment advice.