sebi:WTMO/TCN/CFD/65/Nov/2008
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Facts / Headnote
Exemption granted to the acquirers from Regulation 11(2) of the Takeover Regulations with respect to the increase in shareholding/voting rights consequent upon the proposed buy-back
Provisions invoked
- s. 19
- s. 77A(2)
Regulations
- Reg. 4
- Reg. 4(2)
- Reg. 11(2)
- Reg. 3(1)(l)
Holding
SEBI granted exemption to the acquirers from complying with Regulation 11(2) of the Takeover Regulations in respect of the increase in their shareholding and voting rights from 55.21% to 73.60% consequent upon the target company's proposed buy-back of equity shares.
Full text
Page 2 of 5 the proposed buy-back of maximum of 70,23,970 equity shares at a maximum price of Rs.350 per equity share. 2.4 The acquirers shall not sell any equity shares held by them in the proposed buy- back offer of the target company. In case of 100% response to the proposed buy- back offer of the target company, the voting rights of the acquirers would increase from 55.21% to 73.60%. 2.5 Since, the post buy-back shareholding of the acquirers may consequently trigger regulation 11(2) of the Takeover Regulations, the exemption has been sought by the acquirer under regulation 3(1)(l) read with regulation 4(2) of the Takeover Regulations, inter alia, on the following grounds:- (a) The acquirers are in control of the target company. There would be no change in control over the target company consequent to increase in voting rights. (b) There is no active acquisition of any equity shares of the target company by the acquirers. The proposed increase in voting rights of the acquirers would be incidental to the proposed buy-back offer of the target company. (c) Even after buy-back of the equity shares by the target company, the voting rights of the acquirers will not exceed 75% which meets the requirements of the listing agreement. 2.6 The shareholding pattern of the target company before and after the proposed acquisition is as under:- Particulars Number of equity shares % to the existing equity share capital No. of equity shares post buy back % holding post Buy Back Promoter gro
Page 3 of 5 3.0 CONSIDERATION OF THE APPLICATION BY THE TAKEOVER PANEL 3.1 The aforesaid application was forwarded by SEBI to the Takeover Panel in terms of sub-regulation (4) of Regulation 4 of the Takeover Regulations on August 06,
Page 4 of 5 proposal will also enhance the earnings per share and create long term shareholders value. Considering all those factors, the panel recommends exemption to the Acquirer and PACs under Regulation 4 of the Takeover Regulations.” 4.0
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Source: SecMarx — sebi:WTMO/TCN/CFD/65/Nov/2008. 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.