364 10 Exit of Shareholders
ties will submit a secret and sealed bid to a third party. The party with the lower
bid must sell its shares to the higher bidder at the higher price.
In the English case of Banner Homes Group plc v Luff Developments Ltd,^156 a Texas shoot-
out was understood to mean “an arrangement under which either party could offer put and
call options at a specified price or prices which the other could accept or refuse”.
Third, a party may in practice be able to use a combination of removal mecha-
nisms. The case of Baltic Beverages Holdings (BBH) provides an example of the
simultaneous use of many removal mechanisms.
Case: BBH. In 2007, BBH was a company jointly owned by Carlsberg A/S, a
large Danish brewer, and Scottish & Newcastle plc, a large brewer based in Edin-
burgh. BBH was a market leader in the growing Russian beer market and the
jewel in the crown of both companies.
The BBH Shareholders’ Agreement between Carlsberg and Scottish & Newcas-
tle ran to 2050. It set out express obligations such as a duty of loyalty and pro-
vided that, following material breach of contract by one party, the aggrieved party
had a right to acquire the other party’s shares in BBH at a fair market value. In ad-
dition, the Agreement contained a “Texas shoot-out” clause or a “shotgun clause”:
if one party made an offer, the other had six months to better it or take the money.
Carlsberg decided to seize control of Scottish & Newcastle’s share of BBH.
Scottish & Newcastle being a listed company, Carlsberg joined forced with Hei-
neken N.V., a large Dutch brewer. Their plan was to split Scottish & Newcastle,
with each party obtaining parts of its business.^157
Scottish & Newcastle rejected their offer (section 10.4.2). Scottish & Newcastle
also took defensive action under the BBH Shareholders’ Agreement.
Scottish & Newcastle gave notice to Carlsberg of breaches by Carlsberg of the
terms of the BBH Shareholders’ Agreement. Scottish & Newcastle argued that the
actions of Carlsberg constituted initiation of the voluntary termination provisions
of the Shareholders’ Agreement under which Carlsberg was obliged to offer its
shares in BBH to Scottish & Newcastle. For this purpose, it also initiated formal
arbitration proceedings in accordance with the Rules of the Arbitration Institute of
the Stockholm Chamber of Commerce as provided for under the terms of the
Agreement. The Arbitral Tribunal was requested to confirm that Carlsberg was
obliged to offer its shares to Scottish & Newcastle in accordance with the Agree-
ment. The key elements of the claim submitted by Scottish & Newcastle were:
misuse of confidential information; breach of duty of loyalty and other express
provisions in the Agreement; and circumvention of the early termination provi-
sions of the Agreement.
In January 2008, Carlsberg and Heineken prevailed. The boards of Sunrise Ac-
quisitions Limited (“BidCo”), a newly incorporated company jointly owned by
Carlsberg and Heineken, and Scottish & Newcastle announced that they had
(^156) Banner Homes Group plc v Luff Developments Ltd and another [2000] EWCA Civ 18,
[2000] 2 All ER 117.
(^157) A similar scheme had proven successful some weeks earlier when a consortium of banks
seized control of ABN AMRO, a large Dutch bank, after a takeover bid.