After the entry into force of the Wagevoe on 1 January 2025, the Enterprise Chamber will be the one-stop shop for disputes between shareholders. But how is the value of shares actually determined in the event of exit or ejection? And what does the new Expert Guide to Dispute Resolution mean for your company? In this follow-up to our earlier article, we zoom in on the practical implications of these developments for companies and institutions operating in the Netherlands and internationally.
Why a Guide to Valuation?
Shareholder disputes often revolve around the price of shares. Valuation is rarely an exact science; different assumptions and methods can lead to different outcomes. To limit discussions and increase predictability, the Enterprise Chamber adopted an Expert Guide on 24 February 2025. This Guide provides a clear framework for the valuation of shares in disputes and gives both parties and experts clarity on the process.
What are the main principles of the Guide?
The Guide contains concrete principles for the valuation of shares in the event of exit and demerger:
- Fair value central: Not the 'fair market value', but the fair value of the shares is leading.
- Pro rata approach: The valuation concerns the pro rata portion of 100% of the shares on the reference date.
- Stand-alone and going concern: The starting point is that the company is valued stand-alone and as a going concern.
- Discounted Cash Flow (DCF) as basis: The DCF method is leading, possibly supplemented by other valuation methods for cross-checking.
- Reference date: In principle, the reference date is the date of the Enterprise Chamber's decision.
- No minority discounts or control premiums: In principle, these are disregarded.
These principles ensure more uniformity and transparency in the valuation process.
Customisation remains essential
Although the Guide provides clear frameworks, customisation remains possible. The Enterprise Chamber may deviate from the standard principles if the circumstances of the case so require. Also, based on his professional judgement, the expert can apply alternative valuation methods if this leads to a fairer result.
Practical implications for your company
More predictability and faster dispute resolution
Thanks to the Guide, parties know better where they stand in advance. This reduces the likelihood of lengthy discussions about the valuation method and speeds up the process. For companies that want quick clarity in a shareholder dispute, this is a big advantage.
Transparency and verifiability
The expert must fully disclose his valuation process, assumptions and information used. This means that, as a party, you can better verify whether the valuation was carefully and objectively arrived at. It also makes it easier to object if you disagree with the outcome.
Role of the expert and hearing both sides
The Guidance emphasises the importance of independence and transparency of the expert. Parties are given the opportunity to give their views on the plan of action and the draft valuation report. The adversarial process is also strictly applied so that all relevant information is included in the valuation.
Example from practice
A minority shareholder is bought out after a conflict about the company's share price. Thanks to the Guide, this shareholder knows that the valuation is based on fair value, without minority discount, and that the DCF method is used as a basis. This avoids surprises and provides a firmer basis for negotiations or an amicable settlement.
Legal points of interest
- Articles of association and shareholder agreements: Check whether there are specific agreements on the valuation method. The Guidance provides scope to deviate from this if contractually agreed.
- Provision of information: Make sure you provide the necessary information in a valuation study in a timely and complete manner. Failure to cooperate may have adverse consequences for the outcome.
What can you do now?
- Have your contracts and articles of association reviewed for valuation agreements and the implications (if any) of the Guide.
- Prepare for a transparent valuation process and make sure your internal administration is in order.
- Engage timely legal counsel in the event of (impending) shareholder disputes, so that you are optimally prepared for the valuation process.
Conclusion
The new Guideline of the Enterprise Chamber brings more clarity, predictability and transparency to the valuation process in shareholder disputes. This helps companies and institutions reach a resolution faster and avoid unnecessary proceedings.
More information.
Want to know what these developments mean for your business or do you have a concrete dispute involving valuation? If so, please contact us. We will be happy to advise you on contract law, dispute resolution and the practical application of the Guide in your situation.
