sebi:CO/289/TO/10/2002

SEBI · SEBI · 2001-11-06 · G. N. Bajpai, Chairman

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Facts / Headnote

Application for exemption from making open offer rejected

Regulations

Reg. 4
Reg. 3
Reg. 10
Reg. 22
Reg. 22(12)
Reg. 27(1)(b)
Reg. 27(2)
Reg. 22(14)

Holding

SEBI rejected the Acquirer's (Mysore Breweries Ltd., a subsidiary of SABIL) application seeking exemption from making an open offer for the proposed acquisition of 95,61,400 equity shares (53.54%) of Rochees Breweries Ltd. The Acquirer, being a group company/subsidiary of SABIL, cannot be allowed to acquire shares without making an open offer since SABIL has not been able to obtain FIPB approval.

Full text

between SABIL and the promoters of the Target company together with some other shareholders (hereinafter referred to as "Share Sale Agreement"). 1.2 The shares of the Target company are listed at the Mumbai Stock Exchange, Ahemedabad Stock Exchange, Delhi Stock Exchange and Jaipur Stock Excahange. 2.0 The Acquirer made an application dated August 8, 2002 under sub-regulation (2) of regulation 4 of SEBI (Substantial Acquisition of shares And Takeovers) Regulations, 1997 (hereinafter referred to as "the Regulations") to the Securities and Exchange Board of India (hereinafter referred to as SEBI) seeking exemption for making the open offer for the proposed acquisition of 95,61,400 equity shares of the Target company. 3.0 In the aforesaid application, the Acquirer submitted, inter-alia, the following: 3.1 SABIL and the promoters of the Target company had entered into a Share Sale Agreement dated 6.11.01 together with some other shareholders. As per the agreement Sellers agreed to sell 95,61,400 shares representing 53.54% of the issued and paid up capital of the Target company to SABIL. 3.2 The said sale of shares was conditional inter alia, upon - (i) the making of a public offer to all the other shareholders of Target company in accordance with regulation 10 of the regulations. (ii) the obtaining of approval from Foreign Investment Promotional Board (FIPB) for the contemplated downstream investment by SABIL in the Target company. 3.3 SABIL and South African Breweries Plc. and So

application which have been reproduced hereinbefore. 6.0 ISSUE : 6.1 I have taken into consideration the application dated 8.8.2002, the facts of the case, the documents available on record, the submissions made by the Acquirer during the hearing and also the recommendations of Takeover Panel. 6.2 From the above the following issue arises which needs consideration :- (i) Whether the Acquirer, a group company/subsidiary of SABIL can be allowed to acquire shares of the Target company without making an open offer since SABIL has not been able to obtain the FIPB approval. 7.0 CONSIDERATION OF ISSUE : 7.1 Whether the Acquirer, a group company/subsidiary of SABIL can be allowed to acquire shares of the Target company without making an open offer since SABIL has not been able to obtain the FIPB approval. In the instant case it is observed that SABIL along with the persons acting in concert had made an open offer to acquire 46.46% shares of the Target company vide public announcement dated 09.11.2001. Pursuant to the aforesaid public announcement SABIL had issued letter of offer to the shareholders of the Target company. The aforesaid offer opened on 17 December, 2001 and closed on 15 January, 2002. It is observed that in the aforesaid public announcement as well as in the letter of offer SABIL and persons acting in concert have been shown as the Acquirer and person acting in concert respectively. From the aforesaid it is clear that the instant offer to purchase the shares in the ope

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Source: SecMarx — sebi:CO/289/TO/10/2002. 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.