http://www.firstpost.com/business/sebi-notifies-new-takeover-code-promoters-beware-91128.

html The Securities and Exchange Board of India (Sebi) on Friday notified its new takeover code (Substantial Acquisitions of shares and takeovers regulations), 2011, which will make corporate takeovers easier. The notification says that it will take effect from 23 October. The main change in the new takeover code is that the trigger for making an open offer has been raised from 15 percent to 25 percent. A company can now invest upto 25 percent in another company without making an open offer. Sebi has also raised the open offer size, once the takeover code is triggered, to 26 percent from 20 percent earlier, thus offering an easy exit for investors. Earlier the open offer size was limited to 20 percent which meant shareholders offering their stakes for purchase would often get only partial acceptance. The acquirer would also end up with a suboptimal stake. Earlier the open offer size was limited to 20 percent - which meant shareholders offering their stakes for purchase would often get only partial acceptance. Screengrab from ibnlive Firstpost has already written about how this is beneficial for minority shareholders but not so good news for existing promoters. The notification comes as some relief for those who were seeing a slowdown in decisionmaking at Sebi. A committee headed by C Achuthan had submitted its recommendations on the revamped takeover code a year ago. Achuthan passed away a few days ago. Once the code takes effect, promoters will have to stay alert as acquirers and private equity players can take stakes upto 24.9 percent without triggering an open offer. Many Indian managements run their companies with stakes in the region of 20-30 percent, and they will now have to shore up their holdings. The main features of the code are: Acquisitions of an aggregate of 25 percent or more voting rights in a target company would require the acquirer to make an open offer. An acquirer holding 25 percent or more voting rights in a target company is allowed to acquire additional voting rights in the target company up to 5 percent within a financial year, without making an open offer. Regardless of the level of shareholding and acquisition of shares, acquisition of control over a target company would require the acquirer to make an open offer. Shareholders holding shares entitling them to exercise 25 percent or more of the voting rights in the target company may, without breaching minimum public shareholding requirements under the listing agreement, voluntarily make an open offer to consolidate their shareholding. If the acquisition leads to a change in control or the acquirer can exercise control over the acquired company, it will be an indirect acquisition and will make it mandatory to make an open offer. If the indirectly acquired target company is a predominant part of the business or entity being acquired, the takeover code would treat such indirect acquisition as a direct acquisition for all purposes.

 Timelines of various activities in the open offer process have been revised. A normal open offer process would be completed within 57 business days from the date of public announcement.

http://www.firstpost.com/business/sebi-notifies-new-takeover-code-promoters-beware-91128.html The Securities and Exchange Board of India (Sebi) on Friday notified its new takeover code (Substantial Acquisitions of shares and takeovers regulations), 2011, which will make corporate takeovers easier. The notification says that it will take effect from 23 October. The main change in the new takeover code is that the trigger for making an open offer has been raised from 15 percent to 25 percent. A company can now invest upto 25 percent in another company without making an open offer. Sebi has also raised the open offer size, once the takeover code is triggered, to 26 percent from 20 percent earlier, thus offering an easy exit for investors. Earlier the open offer size was limited to 20 percent which meant shareholders offering their stakes for purchase would often get only partial acceptance. The acquirer would also end up with a suboptimal stake. Earlier the open offer size was limited to 20 percent - which meant shareholders offering their stakes for purchase would often get only partial acceptance. Screengrab from ibnlive Firstpost has already written about how this is beneficial for minority shareholders but not so good news for existing promoters. The notification comes as some relief for those who were seeing a slowdown in decisionmaking at Sebi. A committee headed by C Achuthan had submitted its recommendations on the revamped takeover code a year ago. Achuthan passed away a few days ago. Once the code takes effect, promoters will have to stay alert as acquirers and private equity players can take stakes upto 24.9 percent without triggering an open offer. Many Indian managements run their companies with stakes in the region of 20-30 percent, and they will now have to shore up their holdings. The main features of the code are: Acquisitions of an aggregate of 25 percent or more voting rights in a target company would require the acquirer to make an open offer. An acquirer holding 25 percent or more voting rights in a target company is allowed to acquire additional voting rights in the target company up to 5 percent within a financial year, without making an open offer. Regardless of the level of shareholding and acquisition of shares, acquisition of control over a target company would require the acquirer to make an open offer. Shareholders holding shares entitling them to exercise 25 percent or more of the voting rights in the target company may, without breaching minimum public shareholding requirements under the listing agreement, voluntarily make an open offer to consolidate their shareholding. If the acquisition leads to a change in control or the acquirer can exercise control over the acquired company, it will be an indirect acquisition and will make it mandatory to make

an open offer. If the indirectly acquired target company is a predominant part of the business or entity being acquired, the takeover code would treat such indirect acquisition as a direct acquisition for all purposes. Timelines of various activities in the open offer process have been revised. A normal open offer process would be completed within 57 business days from the date of public announcement.