The Hindu Business Line : SEBI plans changes in takeover code

SEBI is proposing to amend the Acquisition of Shares and Takeover Regulations to revise the definition of public shareholding and promoter and to reduce the upper limit of shareholding from 75 per cent to 51 per cent for availing creeping acquisition limit of 5 per cent.

Currently, SEBI regulations allow promoters to acquire additional 5 per cent of equity from the market through creeping acquisition up to 75 per cent. In the proposed amendment, SEBI has said that promoters holding more than 51 per cent of the paid-up equity capital of a company cannot use the creeping acquisition route to raise their stake.

SEBI has also specified that limited companies must maintain a minimum public holding of 25 per cent. Where a public offer for acquiring additional shares that will result in a less than 25 per cent public shareholding, the acquirer is required to increase the float within 6 months or face being de-listed.

An acquirer, who has acquired more than 55 per cent shares or voting rights in the target company, is under obligation to make a public offer following the acquisition. If such an offer results in public shareholding being reduced below the limit specified in the listing agreement, for the purpose of listing on continuous basis, the acquirer shall only acquire the number of shares in the agreement so as to maintain minimum public shareholding or undertake to raise the level of public shareholding to the levels specified within a period of six months from the date of closure of the public offer. This can be done by issue of new shares by the company or disinvestment through an offer for sale or sale of holdings through the secondary market in a transparent manner.

"It has been decide to harmonise the level of public shareholding for continuous listing as continued in Clause 40A of the Listing Agreement and vis-à-vis other regulation/guideline such as the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations 1997 and SEBI (Delisting of Securities) Guidelines, 2003", says the notice.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Volatile movement

Buzz on top moves

Reliance: Outlook positive, buy January futures

Citigroup Global fined Rs 2 cr for delaying disclosure

SEBI to usher in margin trading — Stock lending, borrowing system to be introduced

Brokers hail SEBI move

SEBI plans changes in takeover code

Reliance, Grasim lead market recovery

ONGC public offer in first week of March

SEBI pulls up HSE for non-redressal of grievances

Shareholders seek poll on Digital delisting — Many hurt over losing pride of ownership