sebi:WTM/KMA/CFD/270/06/2010
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Facts / Headnote
Exemption granted from Regulation 11(2) of the Takeover Regulations for 4.79% increase in shareholding pursuant to proposed buy-back
Provisions invoked
- s. 19
Regulations
- Reg. 4(4)
- Reg. 11(2)
- Reg. 3(1)(l)
- Reg. 4(6)
Holding
SEBI granted exemption to the acquirers (promoter group of Panacea Biotec Limited) from complying with Regulation 11(2) of the Takeover Regulations with respect to their increase in voting rights by 4.79%, pursuant to the proposed buy-back of equity shares. The exemption was granted only for the balance 4.79% (6.26% - 1.47%) after accounting for the creeping acquisition benefit already availed.
Full text
Page 2 of 7 and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 (hereinafter referred to as the Takeover Regulations) read with Regulation 3(1)(l) thereof, to Securities and Exchange Board of India (hereinafter referred to as SEBI). It is stated that the acquirers belong to the promoter group of the target company and currently hold 68.73% of the paid up capital of the target company. It is further stated that the target company proposes to buyback a maximum of 55,92,000 equity shares from open market through stock exchanges at a price not exceeding Rs. 229/- per share. As the proposed buy back would increase the shareholding of the promoter group from 68.73% to 74.99% (assuming 100% response to the buy back) and would trigger Regulation 11(2) of the Takeover Regulations, the aforesaid application is filed seeking exemption from the requirements of the Takeover Regulations, inter alia on the following grounds:
Page 3 of 7 share capital as on September 30, 2008. It was further submitted that, pursuant to the SEBI Circular dated October 30, 2008, the promoters/acquirers alongwith the persons acting in concert have acquired 23,57,709 equity shares of the target company, representing 3.53% of its total share capital, through open market purchase in normal segment on the stock exchange. According to the target company, the current shareholding of the promoters/acquires alongwith the persons acting in concert is 4,59,37,834 equity shares of the target company representing 68.73% of its total share capital. Thereafter, vide letter dated May 6, 2010, the Merchant Banker submitted the details of the acquisition of 23,57,709 (3.53%) equity shares of the target company by the promoters/acquirers along with the persons acting in concert.
Page 4 of 7 “The panel observed that the public shareholding in the Target Company will remain at level above 25% even after the proposed buyback of the equity shares of the Target Company (in case of 100% response) and the offer price of the proposed buyback is Rs.229/- per share which is higher than the book value of Rs.92.10 per share. Further, the panel felt that the proposed buyback will enhance shareholders value and provide exit option to those who desire to exit from the Company. Considering all these factors, the panel recommended exemption to the acquirers from the applicability of regulation 11(2) of the Takeover Regulations subject to the Target Company/acquires complying with the relevant provisions of the Companies Act, 1956, SEBI Regulations and Listing Agreement”.
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Source: SecMarx — sebi:WTM/KMA/CFD/270/06/2010. 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.