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Simplified setup:

Private company,

  • 3 shareholders own respectively 40, 25 and 25% of the shares.
  • The company bought back some of its shares and now own the remaining 10%.

We find a nice cash buyer, who agrees to purchase the company entirely, for a nice round $1,000,000.

I understand the three shareholders will get an amount of cash proportional to their shareholding:

  • Shareholder 1 will get (1,000,000*40%=) $400,000 for its shares.
  • Shareholder 2 will get (1,000,000*25%=) $250,000 for its shares.
  • Shareholder 3 will get (1,000,000*25%=) $250,000 for its shares.

What happend to the remaining cash ($100,000) corresponding to the 10% of shares the company owned?

Is is shared (proportionaly to their respective holding) between the shareholders?

The company in question is in Belgium but I am interested in answers from any jurisdiction.

Hoki
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2 Answers2

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If the company is "sold entirely", the company owned stock goes with it.

Remember that company owned stock is just part of the company ownership that the company has not sold or has repurchased.

keshlam
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The company doesn't own "10% of itself". Company buy back means the remaining shareholders own more of it. If the company bought back from all the owners at the same rate - then it's just dividends.

littleadv
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