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2026-07-15 · Investment Banking · Insight

Squeeze-Outs and Minority Shareholders: The Legal Edge of Finnish M&A

I sat down with Tarja Wist over dinner at Fisken på Disken to talk about something most dealmakers only think hard about when it goes wrong: what happens to the price of a share once the ordinary market stops setting it. In Osakkeiden (pakko)lunastus | Wist | #neuvottelija 363, Wist — a securities-market lawyer who helped draft Finland’s first Securities Market Act as a student, sat on the working group that implemented the EU Takeover Directive in 2006, and now sits as an arbitrator in redemption disputes herself — walked me through two Finnish Supreme Court rulings that show how differently “fair value” can land depending on whether you’re the majority owner steering the company or the minority owner along for the ride. It pairs naturally, in my mind, with an earlier conversation, Yrityskauppakasvu IPOn jälkeen Mikko Keskinen Jari Lauriala #neuvottelija 276, where Tamtron’s CEO Mikko Keskinen and my Translink colleague Jari Lauriala described what listed-company life and First North dealmaking actually look like day to day — the same rulebook that Wist’s cases test at the edges.

The default rule, and why it had to exist

Before 2006, Wist explains, Finland had a recurring problem with public tender offers: a handful of “usual suspects,” professional investors, would never accept the offer itself, staying in the redemption phase instead and, in her words, “practically extorting” more money out of acquirers, because it was usually cheaper for a company to pay them off than to fight a half-year dispute. When the EU Takeover Directive was implemented into the Companies Act, it introduced a default rule: the public tender offer price becomes the redemption price, unless there are special reasons to deviate. Wist calls this “brilliant” — it killed the extortion business model and, just as importantly, brought predictability to the whole mechanism.

The mechanics matter here. A squeeze-out right kicks in once one shareholder controls more than 90% of a company’s shares — in golf-course and housing-company shares alike, Wist notes, “if 90% is in the same hands… a minority shareholder has the right to demand redemption.” Disputed cases start in arbitration — one arbitrator for a smaller company, three for larger or more difficult ones — and unsatisfied parties can then appeal to the district court and, with leave, higher still. Wist says the arbitration stage itself moves quickly; it’s the stacked court appeals layered on top that can drag a case out for years.

When a share is worth less than nothing

The first case Wist and I discussed involved Gumböle Golf, where the articles of association obliged shareholders to pay maintenance fees and cover a loan taken out for course renovations — the same debt-share structure common in Finnish housing companies. When minority shareholders demanded redemption, the sole arbitrator, Professor Seppo Villa, priced the shares negative: those seeking redemption had to pay 11,000 euros per share, even though the shares had last traded at one euro. Wist admits she initially disagreed with Villa’s reasoning, believing “the minimum price of a limited company is zero” (04:35) — since shareholders aren’t liable for a company’s debts and can always let it go bankrupt. What changed her mind was a simple exchange with Villa: she challenged him on why he hadn’t valued it at zero, since the company could have filed for bankruptcy at any time. “Then Seppo looked at me and said, ‘Yes, but they didn’t,’” (05:46) she recalls — and that, she says, is what shifted her view: the majority and the board had actively chosen not to file for bankruptcy, and that decision belonged to them, not to the minority.

The Supreme Court upheld the negative price. The minority shareholders argued the one-euro trading price should govern, since it reflected the market and would let them walk away from the debt liability — the arbitral tribunal and the Supreme Court rejected that, holding that buying the shares meant accepting the maintenance and loan obligations under the articles of association. Wist frames the underlying logic as a species of buyer-beware: “in a way this is a bit of ‘caveat emptor,’ or buyer beware” (10:35) — a minority shareholder can’t control the board’s decisions, but those decisions still set the value of what they hold, for better or worse. Her practical warning extends past golf clubs to housing companies with pending pipe renovations and financial charges: ownership, she says, isn’t only a game of positive opportunities.

When the fair price breaks away from the tender offer

The second case runs the opposite direction. In the Ahlstrom-Munksjö redemption, an international consortium — with one branch of the Åström family itself part of the buying side — made a public tender offer at a premium, alongside a parallel exchange offer that let the family reinvest in the company. Almost everyone accepted the exchange offer, consolidating a large stake for the buyer consortium, but only around 13% accepted the cash tender offer during the actual offer period. That imbalance broke the philosophy underpinning the default rule: as Wist puts it, the whole idea of the redemption price tracking the tender price rests on the premise that “if 90% have accepted this price, then it is indeed a fair price and the rest must accept it too” (17:50) — and here, they weren’t in that situation.

Several other “special reasons” stacked on top: the exchange offer’s pricing versus the cash offer raised fairness questions of its own; the company’s earnings improved and peer multiples expanded as markets recovered from COVID faster than expected, moving the goalposts between offer and redemption; and during an extended offer period, the board announced a shareholder authorization to issue a large number of new shares — read by the minority, in Wist’s account, as something close to a poison pill. Once the Supreme Court decided the link between the tender price and the redemption price had broken, it had to determine fair value independently, giving no weight at all to the stock market price and only passing reference to book-value-style substance value. Instead it turned to discounted cash flow analysis — “DCF, Discounted Cash Flow, which is like this investment banker’s, you know, pet peeve or favorite” (22:39), as Wist puts it — weighing competing expert valuations, discounting one valuator as not credible, and arriving at a final fair value of 21 euros per share, built in part on a weighted average cost of capital analysis that, as Wist notes with some amusement, ended up as a load-bearing criterion inside Supreme Court papers.

First North’s exposed nerve

Wist worries openly about what this means for smaller, First North-listed companies. Documentation there is deliberately lighter than for main-market takeovers — a philosophy the Keskinen and Lauriala conversation illustrates directly. Even though Tamtron’s 2022 IPO could have relied on a lighter, sub-two-million company description, Lauriala describes choosing to prepare the more extensive EU Growth Prospectus once the offering size crossed the threshold, precisely because “it forms a sort of foundation for the future.” Wist’s point is that legal risk around redemption doesn’t scale down with company size: if a justified doubt about fair value can force a small First North company into the same drawn-out dispute machinery as Ahlstrom-Munksjö, that risk alone can chill otherwise healthy takeover activity, on top of the rigidity of the process itself. She also notes the prospectus threshold has loosened slightly under the EU’s Omnibus simplification push — the requirement now kicks in at 30% of an offering rather than 20% — but that easing applies to listing and issuance, not to the takeover offer document itself, which she says remains just as demanding.

What this means if you hold minority shares

Wist’s advice, distilled from both cases, is less about legal maneuvering than about who you own shares alongside. Look, before you buy or inherit, at who the active majority owners are and what obligations sit inside the articles of association — maintenance fees, debt shares, anything that could turn a small stake negative if the majority chooses not to file for bankruptcy. If you do end up in a redemption dispute, know that arbitration itself tends to move fast, but that court appeals stacked on top can stretch a case out for years, and that a squeeze-out at the tender offer price is the fast, low-friction outcome — deviation from it is the exception, not the rule, and comes loaded with cost and delay on both sides.

This is commentary drawn from one lawyer’s account of two Supreme Court rulings on air, not legal advice — anyone facing an actual redemption should get their own counsel.

Where I land

I’ll say plainly what I said to Wist: I think the grip is slipping a little for our own investment banking community around these mechanics. Between a shrinking, retail-thin capital market and fewer live public tender offers and block trades to execute, “the expertise of the corporate finance crowd is thinning out and then it moves more into the hands of you lawyers” (35:36) — which might be fine for legal certainty, but it trades away some of the artistry that used to define this work. What stays with me from these two cases is how differently it plays out depending on which side of the 90% line you sit on: most tender-offer-to-redemption sequences are fast and land at the same price point precisely because there’s no special reason to deviate, and Wist is right that this predictability is a genuine achievement of the 2006 reform. But the golf-share and Ahlstrom-Munksjö cases both show the same thing from opposite directions — a minority shareholder’s fate is set by decisions made by people they don’t control, whether that means the board declining to file for bankruptcy or a consortium restructuring an offer mid-process — so before you buy into any closely held structure, know exactly who else is on the register.

Source episodes

Every claim in this essay is grounded in the following episodes; quotes carry timestamps linking to the original video. English subtitles and full transcripts are on each episode page.

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