Sebi issues master circular on substantial acquisition of shares, takeovers
2 min read . Updated: 16 Feb 2023, 07:33 PM IST
PremiumThe regulator lists down a list of documents to be filed by an acquirer through manager to an open offer necessary for shareholders
Market regulator Securities and Exchange Board of India (Sebi) issued master circular on substantial acquisition of shares, takeovers and said takeover regulations says that acquirer to make an open offer to the public shareholders in case there is substantial acquisition of shares or voting rights, directly or indirectly, or when there is change in control of a target company.
The regulator lists down a list of documents to be filed by an acquirer through manager to an open offer necessary for shareholders.
Sebi’s takeover code has laid out a pricing formula for acquiring shares in an open offer - in the case of a direct and indirect acquisition. There are four pricing metrics - it has to be the higher of either (i) the volume weighted average price of a share over 52 weeks; (ii) the highest price paid by the acquirer in the 26 weeks before the announcement, (iii) the volume weighted average market price of the share in the 60 days preceding the announcement, or (iv) the highest negotiated price under the share purchase agreement.
The tendering of shares by the shareholders and settlement of the same, through the stock exchange mechanism.
“Acquirer will transfer the funds pertaining to the offer to clearing corporation's bank account. Clearing Corporation will then settle the trades by making direct funds payout to shareholders. If shareholders bank account details are not available or if the funds transfer instruction is rejected by RBI/bank, due to any issue then such funds will be transferred to the seller broker’s settlement account for onward transfer to shareholder," said Sebi in the circular.
In order to facilitate ease of operations and convenience in terms of submission of relevant documents with Sebi including public announcement, detailed public statement, draft letter of offer, letter of offer, etc., all Merchant Bankers are advised to file the same through online mode only through Sebi Intermediary Portal