The appraisal rights under the South African Companies Act, 2008 allow a dissenting shareholder in limited circumstances, for example, a disposal by a company of the greater part of the assets or undertaking, to sell its entire shareholding back to the company at the fair value of the shares (section 164). This creates an effective put option for a minority shareholder where it can be applied.
Section 164 is activated when a company gives notice of a shareholders meeting to consider adopting the relevant resolution.
The appraisal remedy is a no-fault remedy meaning that to trigger the appraisal right, no fault, unfairness, or wrongdoing needs to be alleged or proved.
In the case of an M&A transaction, it may be necessary to make provision for an acknowledgment by a minority shareholder/s that it/they has/have no objection to the contemplated transaction as part of the CPs.