Additionally an exchange mandated shotgun clause
has been added to the terms of the warrants.
Any agreement should also address the issue of how to buy one shareholder out from the company through the use of some form of buy/sell provision or "shotgun clause
If any deal is to emerge at this stage, it must be agreed on friendly terms due to the "Shotgun Clause
" placed on BBH, the joint venture between Scottish and Newcastle and Carlsberg, whereby if one party makes a bid for the joint venture, the other party is entitled to make a counter-bid.
Assuming the shareholders are of relatively equal negotiating strength, a shotgun clause tends to ensure the liquidity of each shareholders interest.
Issues may arise in a shotgun clause where the shareholders have materially different negotiating strength.
For example, USAs often have provisions called shotgun clauses
. Shotgun clauses
permit a shareholder to require the other shareholders to either accept an offer to sell their shares or buy the shares of the offering shareholder.