A minority discount is a reduction applied to a less-than-controlling block of shares, below its strict pro-rata share of total equity value, because the holder cannot alone direct the company, approve a sale, or force a fundamental change.
The mirror-image logic of a control premium: the same CBCA voting thresholds that make a controlling block worth more — the two-thirds needed for a special resolution, or the shareholder vote s. 189(3) requires before a sale of substantially all the corporation's assets — are exactly what a minority holder lacks on its own, and that gap is what the discount reflects.
How large it is depends heavily on whether the sale is voluntary or forced. In Ontario, when a court orders a buy-out as an oppression remedy under the OBCA's oppression remedy, s. 248, it will "generally … not apply a minority discount when ordering a buyout as an oppression remedy, on the reasoning that the sale is forced by the majority's own conduct rather than chosen by the seller." A voluntary sale of the same minority block on the open market is a different transaction, and nothing sourced here says the same rule applies to it.
The federal equivalent runs on the same structure with different numbers: CBCA s. 241 gives a court broad power to remedy conduct "oppressive or unfairly prejudicial to… any security holder," including ordering a purchase of the complainant's shares — but neither it, nor anything else fetchable for this hub, states a Canada-wide minority-discount percentage. There is no single published figure to quote.
A family holding company has three shareholders: a parent with 70% and two adult children with 15% each. One child wants to sell their 15% block. Sold voluntarily to an outside buyer, that 15% is priced below its strict pro-rata share of total equity value, because the buyer would be acquiring a position with no ability to force a special resolution, approve an asset sale, or compel a dividend on its own. If instead the child successfully brought an oppression claim and the court ordered the parent to buy the 15% out, the pricing logic described above says a court would generally decline to apply that same discount — the two routes to the same block changing hands are not priced the same way.
See also: Control premium · Discount for lack of marketability · Chartered Business Valuator (CBV).
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