15 December 2011

Takeover regulations 2011 - voluntary offers - FAQ

SEBI has today come out with a FAQ on the new takeover regulations of 2011. While there aren't other surprises, SEBI seems to indicated that there are in fact two types of voluntary offers. This is even though there is only one type mentioned in the regulations. The unstated voluntary offer according to the FAQ has the following characteristic:

  • Minimum offer size is 26% (as opposed to 10% for the prescribed offer)
  • Maximum offer size is 100% (as opposed to maximum size permissible to non public shareholders)
  • No restriction on buying before or after the open offer (versus 1 year cooling up prior to and 6 months cooling down after the public offer).
Ideally SEBI should have come out with this in a circular rather than a frequently asked questions section which is purely clarificatory. But it is a useful piece for those interested in making an open offer even when they are not obliged to.

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