What if a shareholder does not agree with a corporation’s plan to merge ?

If the shareholders’ approval is required to consummate a proposed merger, then any dissenting shareholders who voted against the merger may require the corporation in which the shareholder holds shares to purchase their shares for cash at their fair market value. Cal. Corp. Code § 1300. The fair market value of the shareholders’ shares is determined as of the day, and immediately prior to, the first announcement of the terms of the proposed merger, excluding any appreciation or depreciation as a result of the proposed merger, as adjusted for any stock split, reverse stock split, or share dividend that becomes effective after the merger. The dissenting shareholders have 30 days to demand that the corporation purchase their shares once they have been notified by the corporation that the merger has been approved. Cal. Corp. Code § 1301. A dissenting shareholder’s demand must contain a statement of what the shareholder claims to be the fair market of her shares, and is treated as an offer by the shareholder to sell the shares at that price. If the corporation and the dissenting shareholder agree on the price of the shares, then the shareholder is entitled to the agreed price, with interest at the legal rate from the date of the agreement. Cal. Corp. Code § 1303(a). But if the corporation and the dissenting shareholder fail to agree on the fair market value of the shares, then the shareholder has six months to file an action to have a court determine the fair market value of the dissenting shares. Cal. Corp. Code § 1304(a).