New Communiqué on Squeeze-Out and Sell-Out Rights

A new Communiqué on Squeeze-Out and Sell-Out Rights dated 31 December 2020 and numbered II-27.3 (the “Communiqué”) has been issued by the Capital Markets Board of Turkey (“CMB”), which abolishes the previous Communiqué on Squeeze-Out and Sell-Out Rights dated 12 November 2014 and numbered II-27.2.

In accordance with Article 4(1) of the Communiqué, squeeze-out and sell-out threshold for the controlling shareholder to squeeze out the rest of the shareholders or for other shareholders to sell their shares to the controlling shareholder remains as 98% as was the case in the previous communiqué. The draft version of the Communiqué had envisaged a lower threshold which is not upheld in this final version of the Communiqué issued by the CMB.

The definition of “people acting in concert” has been stipulated under the Communiqué as the real persons and/or legal entities who make share purchases that will give rise to squeeze-out and sell out rights, within the framework of an explicit or implicit, verbal or written agreement. In this connection, as per Article 4(4) of the Communiqué, (i) public companies where real person and/or legal entity shareholders have management control and (ii) real persons and/or legal entities holding management control of a legal person shareholder and public companies in which these persons have management control, shall be deemed as people acting in concert in the determination of share purchases that will give rise to squeeze-out and sell-out rights.

Article 4(3) of the Communiqué also regulates the exceptions which will not give rise to squeeze-out and sell-out rights. Pursuant to this article, acquisition of shares the current shareholders, as a result of capital increases through bonus issues and/or paid capital increases in which the rights to purchase new shares are not restricted, or by reasons such as inheritance, repurchased shares and freezing of voting rights, do not give rise to squeeze-out and sell-out rights.

In addition to the foregoing, while the previous communiqué provided different price calculation methods to be applied to squeeze-out and sell-out rights, the new Communiqué envisages one price calculation method for both rights. As per Article 6(2) of the Communiqué, the share price will be the highest of the following:

a) For the public companies whose shares are traded on the stock exchange;

1) the average of (i) the value determined in the valuation report prepared to determine the price for each share group and (ii) the arithmetic average of the daily corrected weighted average prices in the stock exchange, for the last six months prior to the date of public disclosure of the rights for the companies whose shares are traded on the BIST Star market (Yıldız Market), for the last one month prior to the date of public disclosure of the rights for companies whose shares are traded in markets and platforms other than the BIST Star market (Yıldız Market), and

2) the mandatory tender offer price, which must be calculated within the framework of mandatory tender offer regulations, in the cases where the acquisition of the controlling shareholder position simultaneously leads to a change in management control.

b) For the public companies whose shares are not traded on the stock exchange;


1) the value determined in the valuation report prepared to determine the price for each share group, and

2) the mandatory tender offer price, which must be calculated within the framework of mandatory tender offer regulations, in the cases where the acquisition of the controlling shareholder position simultaneously leads to a change in management control.

If the CMB takes decisions regarding market fraud or extraordinary circumstances affecting the economics and sectors in relation to certain periods, these periods mentioned in such decisions shall not be taken into account in calculation to be made as per the paragraph (a)(1) above.

Please note that this new price calculation method shall not be applied for the cases where the public disclosures relating to the acquisition of the controlling shareholder position or acquisition of additional shares in such position were made before 31 December 2020.