On 3 July 2012, the Luxembourg Parliament approved a new act on squeeze-outs and sell-outs of securities issued by companies currently or formerly listed on a regulated market in the European Union (Bill 5978) (the "Act"). The Act will enter into effect on the first day of the third month following its publication in the Mémorial, which is expected to be on either 1 October or 1 November 2012.
Squeeze-outs and sell-outs were first authorised in Luxembourg by the Act of 19 May 2006 (the "Takeover Act"), which implements into Luxembourg law Directive 2004/25/EC on takeover bids. However, such procedures were limited to public takeover bids and voting securities.
The new Act extends the scope of squeeze-out and sell-out rights in a number of ways.
Firstly, it will now be possible to carry out a squeeze-out or sell-out outside the context of a public takeover bid, provided however the securities have been issued by a listed or formerly listed company. Luxembourg thus does still not provide for a general squeeze-out or sell-out for privately held companies.
Secondly, squeeze-out and sell-out rights have been extended to include non-voting securities and instruments that can either be converted into a company's securities or that entitle their holders to buy or subscribe to such securities, such as warrants, options etc.
The applicable thresholds have not been changed. The thresholds for a squeeze-out and sell-out remain 95% and 90% respectively.
The Luxembourg financial regulator (CSSF) remains responsible for supervising squeeze-out and sell-out procedures and could play a significant role notably in determining a fair price for the securities that form the object of the squeeze-out or sell-out.