tion to a majority shareholder's voting power is if a super-majority is required for a particular voting issue, or certain company bylaws restrict the power of the majority shareholder.
Majority Shareholders and Buyouts
In order for a buyout to occur, an outside entity must acquire over 50 percent of a target company’s outstanding shares, or have the votes of at least 50 percent of the current shareholders who will vote in favor of the buyout.
Even though a majority shareholder may hold more than half of company shares, they may not have the authority to authorize a buyout without additional support, depending on stipulations in the company’s bylaws. In cases where a supermajority is required for a buyout, the majority shareholder can be the sole deciding factor only in cases where they hold enough stock to meet the super-majority requirement and the minority shareholders do not have additional rights to block the effort.
Minority shareholder rights can include the declaration of a derivative action or fraud which effectively block completion of a buyout. If the minority shareholders believe the terms of the buyout are unfair and they wish to exit the targeted business, they can exercise appraisal rights. This allows a court to determine if an offered share price is fair and has the option to compel the business initiating the buyout to offer a specified price.
Majority Shareholder Example
Majority shareholders are often companies that own a controlling stake in many companies. Berkshire Hathaway, of which Warren Buffett is CEO, has a controlling interest in many companies.
Berkshire Hathaway (class A) has shareholders itself, with Feri Wealth Management being the largest holding an 18% stake. This means Berkshire doesn't have a majority shareholder.
Of well-known companies, it is fairly rare to find one with a majority shareholder, since household-name companies are often so large. One exception is Dell Inc. After taking the firm private in 2013, and then bringing it back to the public market in 2018, as of 2019 Micheal Dell controls about half of the company's equity and about 75% of the voting shares according to Bloomberg. This was achieved through the issue of public low-voting shares in 2018, resulting from a complex share structure that was in place prior to the company going public again.