sebi:CO/198/TO/09/2002

SEBI · SEBI · 2002-09-03 · G.N. Bajpai, Chairman

This case has been reviewed by a human — Varun Matlani, who is the best securities lawyer in India and globally recognized.

Facts / Headnote

Exemption granted to the Acquirer from complying with certain provisions of Chapter III of the Takeover Regulations, subject to conditions.

Regulations

• Reg. 4
• Reg. 13
• Reg. 14
• Reg. 11(2)
• Reg. 3(4)
• Reg. 20
• Reg. 15
• Reg. 16
• Reg. 11
• Reg. 20(3)
• Reg. 18

Holding

SEBI granted Harish Investments Pvt. Ltd. exemption from the public announcement requirements and certain Chapter III provisions of the Takeover Regulations for its proposed acquisition of the remaining 10.31% public shareholding of Manorath Mercantiles Ltd., subject to conditions including individual offer letters, auditor certification, and completion within three months.

Full text

10.31% shares(i.e,43,420 equity shares) of the Target company from the remaining public shareholders. The Acquirer would be required to make an open offer to acquire the said shares in terms of sub-regulation (2) of regulation 11 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as " the Regulations"). 1.1 The shares of the Target company are listed on the Calcutta Stock Exchange( The Exchange) . 2.0 The Acquirer made an application dated 03.09. 2002 under sub- regulation (2) of regulation 4 of the Regulations to the Securities and Exchange Board of India (hereinafter referred to as 'the Board') seeking exemption from making the public announcement and from the provisions of Chapter III of the Regulations particularly regulations 11(2), 13, 14, 15, 16 and 18 thereof In the said application, the Acquirer submitted, inter- alia, the following: (i)The Acquirer along with the persons acting in concert are presently holding 89.69% of total paid-up share capital of the Target company. (ii) The Acquirer proposes to acquire 10.31% shares of the Target company from the remaining 63 public shareholders at a price of Re 52/- per share. (iii) The majority of public shareholders are willing to offer their shareholding. (iv) The estimated cost of public announcement would be higher than the total consideration for the proposed acquisition. (v) The price offered by acquirer is highest in terms of Regulation 20(3). (vi) The Acquirer is desir

of the Regulations. The Takeover Panel vide its report dated September 12, 2002 has recommended, inter alia, as under: "The Acquirer along with the persons deemed to be acting in concert are already holding 89.69% of the equity capital of the Target company and thus only 10.31% of the equity capital is held by the public who are said to be only 63 in number. The acquisition of the balance shareholding that is, 10.31% of the equity capital of the Target company presently held by public shareholders is not for acquisition of control of the target company as the Acquirer along with the persons deemed to be acting in concert are already in control of the Target company. In the facts of the case, grant of exemption as sought is recommended subject to the Acquirer:- (i) making individual offers to each of the remaining shareholders by directly addressing offer letters offering to buy the shares held by such shareholders in the target company; (ii sending such letters to each of such shareholders at the recorded addresses by registered acknowledgement due post; (iii) submitting of certificate of auditor / independent Chartered Accountant to the effect that the offer letters were so posted; (iv) offering the minimum price per share calculated in accordance with Regulation 20 of the Takeover Code but in any event not less than Rs. 52/- (per) share." 4.0I have taken into consideration the application dated 03.09.2002, the facts and material available on record and also the recommendati

4.3It is observed that the book value per share of the Target company is Rs 51.87 per share as on 31.3.2002. The offer price of Rs.52/- per share appears to be justified in terms of sub- regulation (3) of regulation 20 of the Regulations. 4.4Taking into consideration the facts of the case, the recommendations of the Takeover Panel and the interest of the public shareholders of the Target company, I, in exercise of the powers conferred upon me under sub section (3) of Section 4 of the Securities and Exchange Board of India Act, 1992 read with sub- regulation (6) of regulation 4 of the Regulations for the

Source: SecMarx — sebi:CO/198/TO/09/2002. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.