Last year I initiated a small position in AviaAM Leasing AB that is now being taken under at PLN 5.62/share. While I never wrote about the company on my blog, I got a fair number of emails from people asking what the implications are and if there are any alternatives like I’m some expert on Polish securities laws (hint: no). Unfortunately, I don’t think there are any good options here. The group of insiders control 78.27% of the outstanding shares right now. Hitting the 80% threshold in Poland is enough to delist the shares from the stock exchange, and after hitting 90% ownership they can initialize a squeeze-out. I don’t know if there are even appraisal rights available for shareholders in a squeeze-out, but it’s a fair guess that it’s not worth the trouble for small foreign holders to go through that process.

So, as a (small) shareholder you can elect not to tender your shares in the tender offer. But the most likely result is that the only effect of that action is that you delay the payment for your shares. Additionally, sometimes getting paid through a squeeze-out procedure has negative tax consequences since in some countries it can be treated like a dividend (no idea how this works in Poland, but it is certainly a risk). So to summarize: I think we just got screwed and there is little we can do about it…

The only positive is probably that this confirms that it was indeed a cheap stock…

Disclosure

Author is long AviaAM Leasing