SEBI allows open offer and delisting together at differential pricing to make M&As easier

#acquirer, #Delisting, #dual pricing, #ma, #SEBI, #Securities Exchange Board of India

The SEBI board made it easy for acquirers to delist target companies after acquisition.

The board of the market regulator, the Securities & Exchange Board of India (SEBI), has eased the framework for delisting companies following an open offer from the acquirer.

The key change in the new rule gives acquirers the ability to announce an open offer and a delisting together at a differential pricing. Under the current norms, even if an acquirer mops up 90 percent of a target company’s shares under an open offer (this is the delisting threshold), it has to bring down its stake to 75 percent before announcing delisting. Current norms require companies to have a minimum public shareholding of 25 percent.

Now, the acquirer can announce a delisting price at a premium to the open offer price simultaneously. If the delisting is successful, all tendering shareholders will get the delisting price. If it is unsuccessful, then all tending shareholders will get the open offer price, which is guided by a SEBI formula.

If the acquirer ends up with shareholding between 75 percent and 90 percent after the open offer, it will be given an additional 12 months to pursue delisting.

“These changes will considerably facilitate M&A in listed companies” said Salil Pitale, Joint MD & Co-CEO at Axis Capital. He added, “This will smoothen the process of M&A with the delisting process, pursuant to change of control, becoming much easier.”

Other experts also welcomed the move.

“All tendering shareholders get the benefit of dual pricing. This has been done in the interest of both the shareholders and the company, so that the companies can have the option of stating intent to delist at the outset and the shareholders get the price they deserve,” said JN Gupta, Member of Primary Market Advisory Committee at SEBI.

If the acquirer still cannot get its target listed in the additional 12 month window, then it has to comply with the minimum public shareholding norm of 25 percent, SEBI said.

Pitale added: “The additional 12 month window to give another chance to attempt delisting, is a very welcome move.”

For a delisting to be successful, company has to acquire at least 90 percent of the stake, without which the delisting cannot go through. Current norms specify that when there is a change of control in a company that triggers the takeover code, the acquirer is required to make an open offer to shareholders for at least 26 percent of shares.

In the past, companies such as Wabco India and Federal-Mogul Goetze, among others, have faced the situation of having to go through a cumbersome process before delisting. The new norms are likely to avert such issues in the future and give a boost to transactions.

Internet Explorer Channel Network
News Related

OTHER NEWS

Snowman Logist Standalone September 2021 Net Sales at Rs 70.07 crore, up 21.45% Y-o-Y

Reported Standalone quarterly numbers for Snowman Logistics are: Net Sales at Rs 70.07 crore in September 2021 up 21.45% from Rs. 57.69 crore in September 2020. Quarterly Net Profit at ... Read more »

Tata Comm Consolidated September 2021 Net Sales at Rs 4,174.02 crore, down 5.16% Y-o-Y

Reported Consolidated quarterly numbers for Tata Communications are: Net Sales at Rs 4,174.02 crore in September 2021 down 5.16% from Rs. 4,401.08 crore in September 2020. Quarterly Net Profit at ... Read more »

Havells India Consolidated September 2021 Net Sales at Rs 3,238.04 crore, up 31.65% Y-o-Y

Reported Consolidated quarterly numbers for Havells India are: Net Sales at Rs 3,238.04 crore in September 2021 up 31.65% from Rs. 2,459.49 crore in September 2020. Quarterly Net Profit at ... Read more »

Marmite maker Unilever warns worst is ahead as it hikes prices to offset 'unprecedented' cost inflation

Unilever says it is taking a series of actions to combat surging production and distribution costs - prices that consumers are unlikely to be shielded from. Read more »

Facebook: Senators urged Mark Zuckerberg to give up its Novi crypto wallet pilot

Photo by: Novi/YouTube Facebook dropped its Novi crypto wallet this week for a pilot run, and just hours after its launch, government officials have called on Mark Zuckerberg to immediately ... Read more »

Malaysia could reopen to international tourists in November, says tourism minister

Malaysia aims to reopen to international tourists in November, and travelers from neighboring Singapore could be among the first to be allowed into the country, the Malaysian tourism minister told ... Read more »

Unemployment down again in last month of massive corona support

Unemployment as a share of the labor force has fallen to 3.1 percent as a result. That is the same percentage as in July. In August, Statistics Netherlands noted a ... Read more »

Scott Technology returns to the black, signs $20m US contract

Freshly streamlined automation and robotics company Scott Technology has returned to profit. The company reported a net profit $9.5m for the year to August after restructuring costs took the company ... Read more »

Unacademy ropes in Zomato's Deepinder Goyal as board member

Zomato’s Deepinder Goyal has joined Unacademy as a board member. Temasek-backed ed-tech firm Unacademy has roped in existing angel investor and Zomato’s founder Deepinder Goyal on its board. Goyal invested ... Read more »

CBS: unemployment down in September

Unemployment fell in September. According to Statistics Netherlands (CBS), thousands of people managed to get back to work in the last month of the massive corona support for businesses. As ... Read more »

Ahead of T20 World Cup, Twitter brings Communities to India and rolls out live cricket scorecards

Twitter has extended its Communities feature to India with the launch of a Cricket-focused community called Cricket Twitter-India that will enable users to talk all things cricket in multiple Indian ... Read more »

Strong Randstad recovery from corona crisis with profit doubling

“The company is in very good condition,” said departing CEO Jacques van den Broek during the presentation of the quarterly figures. “Not only in this quarter, but we came out ... Read more »

Thodi si to lift kara de: How to prepare your best elevator pitch

Note to readers: This is the first installment of a new series of articles designed to give our readers an edge on matters of competitiveness, upskilling/reskilling and knowledge gathering. Essayed ... Read more »

Asia stocks slip as Evergrande jitters return

SINGAPORE (Reuters) – Asian stocks slipped on Thursday (Oct 21) as the upbeat mood that carried the Dow Jones and Bitcoin to records a day earlier ran out of steam, ... Read more »

Energy boss demands price cap reform as firms face '£5bn bill' for market mess

Scottish Power's chief executive argues that the current market is unsustainable and could force a return to the days of only a 'big six' group of suppliers without urgent action. Read more »

China: Crunch time for Evergrande as unit sale collapses

The collapse of China Evergrande’s planned $2.5 billion sale of a property services unit has left the troubled company closer than ever to its end, ramping up fears it will ... Read more »

Tata Motors share price gains 2% after Jefferies raises target to Rs 625, maintains 'buy'

Tata Motors share price rose over 2 percent in the early trade on October 21 after foreign research house Jefferies raised target price to Rs 625 from Rs 565, maintaining ... Read more »

Railway Board is not keen on merging CRIS with IRCTC. Here's why

A month after the Finance Ministry asked Indian Railways to merge the Centre for Railway Information and Systems (CRIS) and RailTel with Indian Railway Catering and Tourism Corporation (IRCTC), the ... Read more »

Hainan's January-September tourism revenues grew 136.9% year-on-year

The province’s total revenue amounted to $16.7 billion Read more »

Facebook may change its name to rebrand itself while also focusing on metaverse

Photo by: Gerd Altmann/Pixabay Facebook is reportedly planning to change its name to something related to metaverse and rebrand itself. It was reported this week that as it is heavily ... Read more »

House of Commons showdown looms over bid to end 'fire and rehire' practice

A campaign in support of the bill, bankrolled by trade unions, is reaching a crescendo ahead of the bill's second reading on Friday, when ministers are expected to be accused of breaking promises to act. Read more »

Media: Hainan National Park to be an important link in a new model of green development

According to the Hainan Daily newspaper, the protected rainforest area will be an important strategic factor which will considerably raise tourism standards Read more »

Congratulations pour in as India races past 100-crore-jab milestone

File image of PM Modi getting first dose of Covaxin on March 1, 2021. (Image: Twitter-@narendramodi) Praise has poured in for India reaching the 100-crore-vaccination milestone from all quarters, from ... Read more »

China Evergrande secures extension on defaulted $260 mln bond -REDD

China Evergrande Group has secured an extension on a defaulted bond, financial provider REDD reported on Thursday, offering rare respite to the developer a day after a deal to sell ... Read more »

Havells India share price declines 9% post Q2 results announcement

Havells India share price slipped 9 percent intraday on October 21, a day after the consumer electrical goods maker announced its September quarter results. Havells India on Wednesday reported a ... Read more »

Rel Ind Infra Consolidated September 2021 Net Sales at Rs 16.74 crore, up 22.84% Y-o-Y

Reported Consolidated quarterly numbers for Reliance Industrial Infrastructure are: Net Sales at Rs 16.74 crore in September 2021 up 22.84% from Rs. 13.63 crore in September 2020. Quarterly Net Profit ... Read more »

KSolves Consolidated September 2021 Net Sales at Rs 10.70 crore, up 53.97% Y-o-Y

Reported Consolidated quarterly numbers for KSolves India are: Net Sales at Rs 10.70 crore in September 2021 up 53.97% from Rs. 6.95 crore in September 2020. Quarterly Net Profit at ... Read more »

Rel Ind Infra Standalone September 2021 Net Sales at Rs 16.74 crore, up 22.84% Y-o-Y

Reported Standalone quarterly numbers for Reliance Industrial Infrastructure are: Net Sales at Rs 16.74 crore in September 2021 up 22.84% from Rs. 13.63 crore in September 2020. Quarterly Net Profit ... Read more »

Filing your income-tax returns? Avoid these five mistakes

Filing income tax returns can be challenging, even if you are not new to the process. As if the cumbersome paperwork is not enough to test your patience, a smooth ... Read more »

Dollar rises to 70.86 rubles

The euro remained unchanged, amounting to 82.5 rubles Read more »

Excited about the entry of many new-age fund houses? Wait before investing in their schemes

Several new fund houses joining the already crowded Indian AMC (asset management company) space. But given that we have less than 5 percent equity penetration here, this may exactly be ... Read more »

Climate change: Household banks have invested billions in firms involved in deforestation, report claims

HSBC was the largest British-based financer of destructive agribusiness making deals worth $6.85bn (£5.25bn). Read more »

‘The Netherlands missed out on 27 billion euros in dividend tax between 2000 and 2020'

Between 2000 and 2020, the Dutch treasury may have lost 27 billion euros in dividend tax. The Dutch government and other European governments have been defrauded or duped for a ... Read more »

India has hit the 100-crore vaccination mark

FIle image: AP Read more »

Wealthy investors chase risky bonds and market-linked debentures: Here's why

The low interest rate environment and soaring equity market have nudged savvy and rich investors towards fixed-income investments that offer higher yields. Others are also looking at market-linked debentures for ... Read more »

Facebook and the dangers of a single-minded focus on profit maximisation

Mark Zuckerberg (Image: Reuters) Data engineer-turned-whistleblower Frances Haugen’s testimony at the United States congressional hearing, on October 5, was clear, and articulate as she spoke about how Facebook Inc (FB) ... Read more »

PNB Housing seeks to withdraw appeal from securities tribunal

PNB Housing Finance filed an application on October 19 before Securities Appellate Tribunal (SAT) to withdraw the appeal against SEBI, the mortgage lender said in an exchange release. On October ... Read more »

What should investors do with Jubilant FoodWorks post-Q2 earnings: buy, sell or hold?

Jubilant FoodWorks share price fell 4 percent in the early trade on October 21, a day after the company that operates fast-food chains such as Domino’s Pizza and Dunkin’ Donuts ... Read more »

What you need to know: Support measures for sectors affected by extended Covid-19 curbs

Sectors significantly affected by the tightened measures, such as retail, will continue to receive wage support under the Jobs Support Scheme. SINGAPORE – A $640 million support package will be ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic