Minority Squeeze Out

When the majority of shareholders of a particular company try to eliminate the shareholders with
only a minority of the company's funds by buying out their stocks. The minority shareholders are
offered proper compensation for the purchase of their remaining stock.

Mechanisms employed to buy-out shareholders

There are no squeeze-out mechanisms in the Philippines. A shareholder who refuses to sell to a
tender offer cannot be forced to sell their shares. Only where a private agreement which allows for
an option to call on the shares of a shareholder or an option to drag a shareholder into a proposed
sale has been made between the shareholders may a shareholder be compelled to sell their
shares. Short-form mergers are not allowed in the Philippines.

It is also worth noting that, unlike other jurisdictions such as the United States and Japan, the
Philippines has not adopted squeeze-out regulations that would allow a company (or a new
investor) to compel minority shareholders to sell their shares.