Tag-Along Right

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Tag-Along Right

The contractually guaranteed right of a minority shareholder to sell his/her stake in a company if the majority shareholder does so. The tag-along rights further guarantee the exact same terms to the minority shareholder. This protects the minority shareholder from the possibility that a new majority owner will come along and ruin the company or take it in a direction disadvantageous to the minority shareholder. Tag-along rights are also called co-sale rights and are common in venture capital agreements.
References in periodicals archive ?
The agreement also allows BOI certain customary investor protections, including prohibiting the issuance of securities in CB&T senior to its common stock, and granting BOI certain registration rights, rights to participate in future financings, rights of first refusal and certain tag-along rights.
The acreage swap will allow Jericho to increase its acreage position in areas in or near current horizontal well development; participate in the drilling of multiple horizontal wells targeting the Meramec and Osage formations within the companys acreage footprint; continue to aggregate critical drilling, completion and lateral placement data from a STACK operator; secure tag-along rights for a portion of its Blaine County STACK JV acreage; and increase production and potentially reserves.
Under the mandatory tender offer for all the shares of BBVA Chile required under Chilean law or the Said family's tag-along rights under the shareholders agreement of BBVA Chile, the Said family has the right to sell its shares of BBVA Chile on the same basis to Scotiabank.
Tag-along rights are when that, if the club is sold in the future, the value of the Trust's remaining shares has to be valued the same as the shares of all other shareholders.
Tag-along rights provide that when an owner has negotiated a sale
The article also states that when a shareholder or a group of shareholders have reached an agreement to sell shares in the company equal to or exceeding (50 percent of) the total paid up capital, this agreement shall not be enforceable unless other shareholders are given the chance to exercise their tag-along rights.
The conditions precedent include the other shareholders of TAP not exercising their pre-emption rights and tag-along rights, and the approval of the board of directors of TAP.
The desire for more control is reflected in the issue about tag-along rights. Only 31.40% of delisted companies grant tag-along beyond what is legally required, while 50.62% of companies that remained public do.
Profits interests are extremely flexible and may include terms that are typically found in traditional equity grants, including vesting requirements, acceleration and forfeiture provisions, voting restrictions (if desired), drag-along and tag-along rights, and other transfer restrictions.
Drag-along and tag-along rights: If a shareholder decides to sell shares, can he trigger an obligation of other shareholders to sell on the same terms (drag-along rights)?
Bank of America will no longer have the right to appoint a person to Itau Unibanco s board or have tag-along rights during an eventual sale of control of the Brazilian bank after the stake sales are finalized, Itau Unibanco added.
(3.) Tag-along rights protect minority shareholders in venture capital deals.