Key Points:
1.An entity buying 25% stake in a listed firm will have to mandatorily make an open offer to buy an
additional 26% shares from the public.
2. Initial trigger threshold increased to 25 % from the existing 15 %.
3.No acquirer shall acquire shares in a target company which taken together with shares or voting rights held by him entitle them to exercise 25 per cent or more of the voting rights unless the acquirer makes a public announcement of an open offer.
4.It will come into effect from October 2011.
5.No separate provision for non-compete fees, which allows promoters to higher price than the public
shareholders, and all shareholders should be given the exit option at the same price. SEBI, as part of the new code, allowed voluntary offers subject to certain conditions.
6.The existing definition of control would be retained and the minimum offer size shall be increased to 26% of the target company.
7.Decision to abolish the non-compete fees that acquirers generally pay to the sellers in merger and acquisition deals.
Related facts:
The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992. SEBI`s role is to protect the interests of investors in securities and to promote the development of, and to regulate, the securities market.UTI chief UK Sinha has been appointed as the new SEBI chairman this year.
