cs executive: l-20 take over code

Compiled by: CA Vidhi Dedhia L- 20 Take over code

L. 20 Takeover Code

PROMOTER

“Promoter” as per the SEBI (Substantial Acquisition of shares & take over) Regulation, 2011. Promoter

As per SEBI (Issue of capital and disclosure requirement) Regulation, 2009

Includes member of the promoter group

Includes:a. The person/ persons who are in control of the issueb. The person / persons name in the offer documentc. Who formulate plan to which the specified security are offered to the public

INFREQUENTLY TRADED SHARES UNDER SEBI TAKE OVER CODE

Infrequently traded shares Annualized trading turnover 12 months preceding month in which announcement is made

Is < than 10% listed number of shares

SEBI { Note- if it is greater than 10 % they are frequently traded shares}

CONTINUAL DISCLOSURE :-

As per SEBI (substantial Acquisition of shares & take over) Regulations,2011

Continual disclosures

Of aggregate shareholdings shall be made

Within 7 days of financial year ending on 31st March

QLI, Success Oriented Coaching for CA & CS I www.qli.co.in I 90290 83303 / 99203 83303

Within 7 days

http://www.qli.co.in/


Such disclosures shall be made by :1. Shareholders equal to 25 % or more shareholding persons2. Promoters 3. Others

Continual disclosures are made to the target company and Stock exchanges (where the shares of target company are listed.

MANDATORY BID AND COMPETITVE BID

Mandatory BIDS:

It arises due to regulatory requirement This type of bid requires the acquirer to bid for acquisition Following are the cases when such requirement arises

For Acquiring 25 % or more of shares For acquiring more than 5 %shares Or voting rights of company or voting rights in a financial year

By the acquire + who along with the Person acting in concert holds 25 % or more but less than

MAXIMUM PERMISSIBLE NON PUBLIC HOLDING

MPNPH- 5 % shares or voting rights in financial year by acquirer + + Persons who hold 25% or more but less than permissible


take over 2 types

MAndatory bids

CompetitveBIds

Acquirer co.

Target co.


Compiled by: CA Vidhi Dedhia L- 20 Take over code Competitve bid

T his type of bid is made by person other than the acquirer, who has made FIRST PUBLIC ANNOUNCEMENT.

Such offer can be made within 15 days of the detailed public statement by the original acquirer.{ public statement --------15 days---------------- offer by original acquirer} As per regulation 20 of the take over code, the original acquirer can revise the terms & price

upwards on receiving competitive bid

CREEPING ACQUISITION

SEBI (Substantial Acquisition of shares and take over) A person + along with persons holding 25 % or more but < than * MAXIMUM NON PUBLIC SHAREHOLDING

IN target company . Can acquire additional 5 % voting rights in any financial year ending on 31st March, only after making open

offer.

holding 25 % or more in target co.

MAXIMUM PERMISSIBLE LIMIT OF NON PUBLIC SHAREHOLDING IS


MAXIMUM PERMISSIBLE LIMIT OF NON PUBLIC SHAREHOLDING

LISTED CO.other than

Public Sector

75%

Public sector

90 %


Compiled by: CA Vidhi Dedhia L- 20 Take over code What should be the “Minimum Price For Creeping Acquisition”?

As per regulation 8, the minimum offer shall be HIGHEST of the following:

a. Highest negotiated price per share Of TARGET Co.

For Acquisition under agreement : which will attract obligation to make a public announcement of “open offer”.

b. The volume weighted average price paid / payable for acquisition

By acquirer or any person acting in concert with him

During 52 weeks preceding public announcement

c. The highest price paid/ payable for any acquisition

By acquirer or any person acting in concert with him

During 26 week immediately prceding date of public announcement.

d. The volume weighted average market price For the period 60 trading days --- immediately preceding the date of public announcementAs traded on stock exchange.




e. Where the shares are not frequently traded The price determined by acquirer & manager to the open offer based on valuation parameters.

ESCROW ACCOUNT- Discuss the provisions of escrow account as per the SEBI take over code.

ESROW ACCOUNT means A security deposit or Trust Account

For meeting payment obligation under take over code.

PERSON ACTING IN CONCERT under SEBI ( Substantial Acquisition of shares & take over code)

As per regulation 2(q)

1. Persons who, o with common objective oro purpose of acquisition of shares or voting rights in oro exercising control over target company,o pursuant to an agreement or understanding formal or informal, directly or indirectly cooperate or o Acquisition of shares or o Voting rights

2. The persons falling within the following categories shall be deemed to be acting in concert with other persons within the same category:

o A company, its holding co., subsidiary co. and any company under the same management or controlo A company, its directors and any person entrusted with management of comp any.o Directors of companies referred in 1st sub point.o Promoter and members of the promoter group o Immediate relatives o A mutual fund , its sponsors, trustees, trustee company and asset management relativeso A collective investment schemeo A venture capital fund o FIIo A merchant banker and its client, who is an acquirero A portfolio manager and its client who is an acquirero Banks, Financial advisors and stock brokers of the acquirer



cs executive: l-20 take over code

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