The Hindu Business Line : Options in an open offer

What happens if there is a competitive offer and a person had availed himself of the first offer at a lower price? Can the person switch his acceptance to a better offer?

Yes, switching of acceptances between different offers is possible.

The shareholder has the option to withdraw acceptance tendered by him up to three working days prior to the date of closure of the offer

To enable the shareholders to be in a better position to decide as to which of the subsisting offers is better and also not to cause last minute decisions/confusions, the offer price and size are effectively frozen for the last seven working days prior to the closing date of the offers.

Shareholders may wait till the commencement of that period to be aware of upward revisions in the offer price and size of the offers, if any.

Are only those shareholders whose names appear in the register of target company on a specified date, eligible to tender their shares in the open offer?

No. Any shareholder who holds the shares on or before the date of closure of the offer is eligible to participate in the offer.

Can an acquirer withdraw the offer once made?

No, the offer once made cannot be withdrawn except in the following circumstances:

* Statutory approval(s) required have been refused;

* The sole acquirer being a natural person has died;

* Such circumstances as in the opinion of the Board merits withdrawal.

How can a person avail himself of the offer if he/she has not received the letter of offer?

The public announcement contains procedure for such cases i.e. where the shareholders do not receive the letter of offer or do not receive the letter of offer in time.

The shareholders are usually advised to send their consent to Registrar to offer, if any or to MB on plain paper stating the name, address, number of shares held, distinctive Folio No, number of shares offered and bank details along with the documents mentioned in the public announcement, before closure of the offer.

The public announcement and the letter of offer along with the form of acceptance is available on the SEBI Web site at www.sebi.gov.in.

Is there any compensation to a shareholder for delayed receipt of payment under the offer?

Acquirers are required to complete the payment of consideration to shareholders who have accepted the offer within 15 days from the date of closure of the offer.

In case the delay in payment is on account of non-receipt of statutory approvals and if the same is not due to wilful default or neglect on part of the acquirer, the acquirers would be liable to pay interest to the shareholders for the delayed period in accordance with the regulations.

If the delay in payment of consideration is not due to the above reasons, it would be treated as a violation of the regulations and therefore, also liable for other action in terms of the regulations.

Is the acquirer required to accept all the shares under the open offer?

No, if the shares received by the acquirer are more than the shares agreed to be acquired by him, the acceptance would be on proportionate basis.

Source: www.sebi.gov.in

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