A shareholders agreement between three shareholders of a company set a right of first refusal in case of sale of shares by one of the shareholders. Two of the shareholders approached the third in an offer to purchase the shares of both (but not one of them) but he insisted on purchasing shares of one only.
The Court held that when a general right of first refusal exists it does not preclude a few shareholders to jointly enter into a transaction with a third party and then such need offer the group of shares under the same terms offered by the third party. However, in this case the shareholders agreement set different provisions as to the application of the right of first refusal to the different shareholders for the purpose of preserving the balance of powers in the company and thus the two shareholders could not obligate the third one to purchase their shares as one. This means that both right of first refusal offers are improper and the third shareholder could not accept one and not the other.