Rump

The Definition Of ‘Crust’

Rump is the name of a group of minority investors who refuse to sell their shares in corporate actions such as rights issue or a merger or acquisition.

Breaking The ‘Crust’

Rump of shareholders can be forced to sell their shares without the consent of the underwriters, through displacement, depending on the proportion of shares owned by the majority, and while he is on the same terms that the offer to the remaining shareholders. For example, in the United Kingdom, shareholders holding 90% shares of the company may consent, to squeeze out other minority shareholders.

The lower back can stall or stop acquisitions if they own enough shares. However, if they are not in a position to block the merger, their share of the company’s cash flow may be enough to discourage acquisition of the company from completing a merger or acquisition, in the first place.

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