LBO Squeeze-Out
A leveraged buyout strategy where minority shareholders are forced out by the majority using a variety of financial techniques, often controversial and legally complex.
Implications
A financial strategy in which an acquiring company, often through a leveraged buyout (LBO), forces minority shareholders to sell their shares, often at a premium, to gain full control of a company, used to streamline operations or implement strategic changes without opposition.
Example
Example: A private equity firm executes an LBO squeeze-out to take full control of a manufacturing company, buying out minority shareholders at a premium price to consolidate ownership and implement restructuring plans.
Related Terms
Different from a standard buyout, which might involve voluntary sales of shares, a squeeze-out is often more aggressive and may involve legal mechanisms to compel minority shareholders to sell.
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