SEBI Takeover code

The takeover regulations are applicable on the acquisition of voting rights or control over the listed company

- persons who for a common objective of substantial acquisition of shares or voting rights or gaining control over the target company, directly or indirectly co-operate by acquiring or agreeing to acquire shares or voting rights in or control over the target company.
PACs

SEBI Takeover Regulations, 1997

SEBI Takeover Regulations, 2011

15%

25%
Creeping Acquisition 5% in each FY

CREEPING ACQUISITION ZONE REDEIFINED

SEBI Takeover Regulations, 1997 SEBI Takeover Regulations, 2011

15% 55%

25% 75%

Eligibility
1. Prior holding of atleast 25% or more shares 2. No acquisition during the preceding 52 weeks without attracting the obligation to make a public announcement No further acquisition of shares for a period of 6 months after completion of the open offer except by way of another voluntary open offer or competing offer

Restriction

Opening- Not later than two working days Amount of Escrow deposit

Forms of Escrow account Cash Bank Guarantee Freely transferable equity shares or securities

Once a shareholder has tendered his shares in the open offer made by the acquirer, then he/she cannot withdraw or revise his/her request

1. 2. 3. 4. 5.

6.
7. 8. 9.

Appointment of Merchant Banks Public announcement Filing letter of offer with SEBI Minimum offer price Minimum public offer Obligation of the board of target company/merchant banker Withdrawal of offer Escrow account competitive bids

Facts:
Mr. HP Agarwal along with persons acting in concert with him (acquirers) are part of the promoter group of Secur industries Ltd and currently holds713207 equity shares of the target company constituting 17.49% of its paid up capital Now the acquirers proposes to acquire 12lakh equity shares by way of preferential allotment and 10lakh warrants(convertible into equity shares) thereby increasing the holding of the acquirers from 17.49% to 46.40% of post conversion of warrants resulting into mandatory regulations of SEBI takeover code. Therefore, the acquirers have filed this present application seeking the exemption from the applicability of SEBI takeover code grounds of exemption as hereafter

No change in control Target company owes unsecured loan of Rs.1.20 crore to the acquirers. However due to the loss for last many years, it was not in a position to pay of such debts Thus to review the financial position and to meet the long term and short term working capital requirements, it proposes to convert the unsecured loan into equity shares and to induce further funds by way of preferential allotment

The application was presented to the takeover panel who directed the target company to once again pass the resolution through the postal ballot and thereafter approach SEBI for exemption. Accordingly after passing the resolution, the acquirers have once again approached the SEBI. The said application was once again forwarded to takeover panel for consideration. On the basis of above facts and circumstances and considering present financial position of the target company. Takeover panel recommended the case for exemption and SEBI also accepted its recommendation