Squeeze Out Chile

Chile Squeeze-out Guide IBA Corporate and M&A Law Committee 2010

Contact
Paulo Larrain Noguera Larrain & Dulanto plarrain@nld.cl www.nld.cl

Contents
SQUEEZE OUT IN CHILE - A GENERAL OVERVIEWSQUEEZE-OUT IN PUBLIC COMPANIES SQUEEZE-OUT IN PRIVATE COMPANIES ENFORCEABILITY ISSUES

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SQUEEZE OUT IN CHILE - A GENERAL OVERVIEW
This guide sets out an overview ofthe squeeze out rules applicable to Chilean public and private companies. Squeeze out was recently incorporated in the case of public companies pursuant to Law 20.382. With respect to privatecompanies, squeeze-out is contemplated only concerning certain special companies called “Sociedad por Acciones” (“SpA”).

SQUEEZE-OUT IN PUBLIC COMPANIES
Pursuant to article 71 bis of the Corporations LawNo. 18.046 (the “Corporations Law”) the minority shareholders of a public company have an appraisal right if a controlling shareholder acquires more than 95% of the shares of a public company. Thisappraisal right must be exercised within 30 days as from the date on which the controlling shareholder acquires the mentioned equity participation, and a notice on that regard should be published in anewspaper and in the company’s website if any within 2 days. Likewise, article 71bis grants the controlling shareholder the right to squeeze all the minority shareholders who did not exercise theabove-mentioned appraisal right, if the following requirements are met: (i) (ii) (iii) The controlling shareholder must acquire more than 95% of the shares of the relevant company as a result of a publictender offer for 100% of the total shares of such company; At least 15% of the acquired shares must be purchased from non-related shareholders; The by-laws of the company must contemplate thissqueeze-out right. The incorporation of this squeeze out right in the by-laws must be approved by a quorum of at least 2/3 of the total shares; and
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(iv) The purchase price must be the same as the one...