The protection of minority shareholders during delisting in Germany and in the U.K.

Abstract

The thesis seeks to compare the protection of minority shareholders during delisting in Germany and in the UK. Delisting refers to a publicly traded company leaving the stock market. In order to compare the protection afforded by the relevant legislator the thesis first seeks to give an overview of the interests touched upon by delisting, finding the main risk for minority shareholders is unlike often assumed not a loss of value but the loss of the share’s tradability. The thesis then compares the approach taken towards the problem and the instruments utilized by both legislators. Here the thesis finds that the German law represents a stricter and inflexible solution, while the British law grants the parties far reaching freedom. The thesis finds that German law in theory offers a higher level of protection. The thesis then considers the different shareholder structure in the UK, concluding that in practice the difference in protection is not as stark as often assumed. As some gaps remain, and since due to their financial interests the freedom offered by British law is of little benefit to minority shareholders, the thesis concludes that regarding the protection of minority shareholders the German law is preferable.