COMMUNIQUE ON SQUEEZE OUT AND SELL OUT RIGHTS IN PARTNERSHIPS PUBLISHED

The Capital Markets Board's “Communiqué on Squeeze-Out and Sell-Out Rights” numbered II-27.2 was published in the Official Journal on 12 November 2014 and entered into force.

The communiqué, prepared on the basis of Article 27 of the Capital Market Law, regulates the procedures and principles regarding the implementation of the controlling shareholder's right to squeeze out other shareholders from the partnership and the right of other shareholders to sell their shares to the controlling shareholder in joint stock companies whose shares are offered to the public or deemed to be offered to the public. This communiqué numbered II-27.2 repealed the " Communiqué on Squeeze-Out and Sell-Out Rights" numbered II-27.1 published in the Official Journal dated 2/1/2014.

However, according to the transitional provision in the Communiqué, if it was disclosed to the public that the controlling shareholder position has been acquired or an additional share was taken while in this situation before 31 December 2020, the usage fee of the rights will be determined in accordance with the former " Communiqué on Squeeze-Out and Sell-Out Rights" numbered II-27.1.

The fourth article of the Communiqué determines the "arising of rights and calculation procedure of voting rights". According to this:

As a result of the takeover bid or in case the voting rights regarding the shares owned in any way, including acting together, reach 98% of the voting rights of the partnership, or if an additional share is received while in this situation, except for the exceptions specified in this Communiqué, the controlling shareholder has the right to squeeze out all other shareholders from the partnership regardless of whether their shares are privileged, and the other shareholders also have the right to sell their shares to the controlling shareholder. In determining the ratio regarding voting rights, direct and indirect shares owned by the controlling shareholder are considered. Voting privileges are not considered. Shares based on usufruct or purchase right and the squeeze out right in partnerships cannot be used.

The squeeze out or sell out rights in partnership does not acquired due to the reasons such as shares acquired by existing shareholders, inheritance, repurchased shares, freezing of voting rights.

It is accepted that the following persons act together in the determination of share purchases which will cause to be acquired the squeeze out and sell out rights in partnership:

  1. Partnerships in which real and / or legal person partners have management control.
  2. Real and/or legal persons holding management control of legal person partners, partnerships in which these persons have management control.

The liabilities of corporations arising from other legislation other than the capital market legislation are reserved.

The procedure for the use of the Rights was set out under the Article 5 of the Communiqué.

Other partners other than the controlling shareholder who wish to exercise their right to sell may submit their request to use the right to sell to the partnership in writing within two months following the public disclosure of the summary of the appraisal report on share values. Until the end of the term of use of the right to sell, the controlling partner will continue to exercise the right to sell, even if the controlling partner loses his/her position as a controlling partner, but during the said period, the controlling partner will not be able to purchase additional shares, except for the purchases made due to the exercise of the right to sell.

The controlling partner is obliged to deposit the share prices into the partnership account within two business days at the latest following the receipt of the request for use of the right to sell.

The price of the shares owned by the partners who want to use their right to sell will be paid by the partnership on the first business day following the deposit of the share prices to the partnership account and share transfer transactions will be finalized with the payment. In addition, the right to sell can be used by the investment firm.

Within the scope of the Communiqué, the matters to be considered in the calculation of the cost of using the squeeze out and sell out rights in partnership are determined separately for the corporations whose shares are traded on the stock exchange and the corporations whose shares are not traded on the stock exchange.

For partnerships whose shares are traded on the stock exchange;

For partnerships whose shares are traded on the Star Market, the last month before the date of the public disclosure of rights; For partnerships whose shares are traded in markets and platforms other than Yildiz Market, within the last six months before  the date of the public disclosure of rights; The arithmetic average of the daily corrected weighted average prices in the stock market and the value determined in the valuation report prepared for the determination of the price for each share group and in the event that and the acquisition of the controlling shareholder position simultaneously cause a change in management control, the higher of the mandatory takeover bid price, which must be calculated within the framework of takeover bid regulations, will be considered as the share price.

For partnerships whose shares are not traded on the stock exchange;

The value determined in the valuation report prepared for the determination of the price for each share group and in the event that the acquisition of the controlling shareholder position simultaneously cause a change in management control, the higher of the mandatory takeover bid price, which must be calculated within the framework of takeover bid regulations, will be considered as the share price.

Source: Communiqué on Squeeze Out and Sell Out Rights in Partnerships published on the Official Journal dated December 31, 2020 and bearing the issue number 31351