Form 9801 Squeeze-Out Notice UK: Section 979-981 Explained

At a glance

• Statutory basis: the squeeze-out right sits at section 979 of the Companies Act 2006 (Part 28, Chapter 3); form 9801 is the notice given under it, and its timing is governed separately by section 980.
• Threshold: the offeror must have acquired, or unconditionally contracted to acquire, at least 90 percent in value of the shares the offer relates to and, where those shares carry votes, 90 percent of the voting rights — tested separately for each class if the offer covers more than one.
• What counts: only shares acquired "by virtue of acceptances of the offer" count towards the 90 percent — shares the offeror already held before the offer are excluded from both sides of the calculation (section 974).
• Time limit to serve notice: section 980(2) — no later than three months from the day after the last day for accepting the offer, or six months from the date of the offer if that period ends earlier (where section 980(3) applies).
• Shareholder's response window: six weeks from the date of the notice to choose a form of consideration (section 981(3)) or to apply to the court to block or vary the acquisition (section 986).
• Filing: form 9801 must be accompanied by a statutory declaration (form 980dec) confirming the section 979 conditions are met.

What this document is

Form 9801 is the written notice that starts the compulsory acquisition, often called the squeeze-out, of shares held by shareholders who did not accept a takeover offer. The right to give it comes from section 979 of the Companies Act 2006, which sits inside Part 28 Chapter 3 governing takeovers of UK companies. Section 980 adds further rules about how and when the notice must be given, and section 981 sets out what happens once it has been served.

The notice can only be given once the offeror has acquired, or contracted to acquire, at least 90 percent in value of the shares the offer relates to and 90 percent of the voting rights carried by those shares — counted only from shares acquired through acceptances of the offer itself, not any stake the offeror already held. Where the offer covers different classes of share, the 90 percent test has to be met for each class separately (section 979(3)-(4)).

Once served, the notice tells the non-assenting shareholder that the offeror is entitled and bound to acquire their holding on the same terms that were offered to, and accepted by, the majority (section 981(2)). The shareholder then has a six-week window to apply to court under section 986 if they want to challenge the acquisition or its terms.

Absent a successful challenge, the shares transfer to the offeror and the consideration is held on trust for the former holder (section 981(9)).

How to use this document

1. Confirm the 90 percent threshold has been crossed. Before anything else, check that the offeror has acquired or unconditionally contracted to acquire, by virtue of acceptances of the offer, at least 90 percent in value and (where applicable) 90 percent of voting rights in the shares to which the offer relates. Where more than one class is involved, section 979(3)-(4) requires the test to be met for each class independently. Get the maths right, because a premature notice is an invalid notice.
2. Act within the statutory time limit. Section 980(2) fixes the cut-off: the notice cannot be given later than three months from the day after the last day on which the offer can be accepted, or, where section 980(3) applies, six months from the date of the offer if that period ends earlier. Diarise the deadline and build in time for printing, posting, and proof of service.
3. Prepare form 9801 and the statutory declaration. Complete form 9801 in the prescribed format, identifying the offer, the shares being acquired, and the consideration. It must be accompanied by a statutory declaration on form 980dec, made under the Statutory Declarations Act 1835 before a commissioner for oaths, notary public, justice of the peace, or solicitor, confirming that the section 979 conditions are satisfied. Where the offeror is a company, a director must sign both documents. Any inaccuracy in these details can give a challenger leverage.
4. Serve the notice on each non-assenting shareholder. Send the notice to every holder of shares covered by the offer who has not accepted it, using the address on the register of members. Keep evidence of dispatch. Where the offer gave a choice of consideration, section 981(3) requires the notice to explain the choice and the default that applies if the shareholder does not respond within six weeks.
5. Complete the transfer after the objection window closes. If no shareholder successfully applies to court under section 986 within the six-week period, section 981(6) requires the offeror to send the company a copy of the notice and the consideration, together with an instrument of transfer for registered shares. The company then registers the offeror as the holder and holds the consideration on trust for the former shareholder.

This page provides general information about the section 979 squeeze-out procedure under the Companies Act 2006. It is not legal advice and is not a substitute for advice tailored to your specific transaction — always check legislation.gov.uk and GOV.UK for the current position before acting.