SEBI recently put out a set of FAQs relating to the Takeover Regulations, 2011 that came into effect on October 22, 2011. While a substantial part of the FAQs relate to either explanation of matters or elaboration of certain aspects of process and mechanics, they also address substantive issues on a few counts. We had earlier discussed the issue as to whether hostile takeovers are permissible...
Supreme Court’s Silence on “Control” Under the Takeover Regulations
Early last year, the Securities Appellate Tribunal (SAT) had passed an order in the Subhkam case holding that protective provisions in shareholders’ agreements (such as affirmative rights) adopted by investors do not amount to “control” for purposes of the SEBI Takeover Regulations. Although SEBI had initiated an appeal before the Supreme Court, the matter has now been disposed off by the Supreme...
Hostile Takeovers under the New Code
The new SEBI Takeover Code is set to come into force on October 22, 2011. One of the issues that has received great attention is the ability (or otherwise) of acquirers to carry out a hostile acquisition of an Indian listed company under the new Code. A recent press report has the background. As far as the Takeover Code of 1997 is concerned, we have previously seen (here and here) that the...
New Takeover Regulations Notified
In July this year, SEBI accepted most of the recommendations of the Takeover Regulations Advisory Committee (TRAC). The key changes have been listed here. Yesterday, SEBI formally notified the new version in the form of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 that will come into effect on the 30th day from its publication in the Official Gazette. SEBI has also...
No Takers for Takeover Offers
Historically, the response of public shareholders to takeover offers in Indian companies has been lukewarm. This is primarily due to the fact that the market price of the company’s shares following the takeover announcement tends to be higher than the offer price. However, a report in the Business Line contains a study of recent offers indicating that shareholders who did not exit in the offers...
CCI Approves Acquisition of UTV by Walt Disney
(The following post has been contributed by Piyush Prasad, who is an alumnus (B.Sc. LL.B.) of the National Law University, Jodhpur) The Competition Commission of India (“CCI”) on August 25, 2011 approved the proposed combination of Walt Disney Company (Southeast Asia) Pte. Limited (“the “Acquirer”) and UTV Software Communications Limited (“the “Acquired Enterprise”) under section 31 (1) of the...
CSX/TCI: Appellate Court on Disclosures and Takeover Law
Sometime ago, we had the opportunity to discuss a decision of the U.S. District Court for the Southern District of New York pertaining to the use of cash-settled total-return equity swaps by acquirers and whether that would trigger disclosure requirements under appropriate U.S. regulations governing takeovers. Now an appellate court has pronounced its decision in which the majority of the judges...
Changes to Takeover Regulations
SEBI has approved most of the changes suggested by the Takeover Regulations Advisory Committee (TRAC) last year to the Takeover Regulations. The key changes are summarized in SEBI’s board note: a) Initial trigger threshold increased to 25 % from the existing 15 %. b) There shall be no separate provision for non-compete fees and all shareholders shall be given exit at the same price. c) In cases...
Maiden Order under Merger Control Regulations
Legally India has reported the issuance of the first order by the Competition Commission of India (CCI) under the Combination Regulations that came into force on June 1, 2011. CCI’s order considers the acquisition by Reliance Industries Limited and Reliance Industrial Infrastructure Limited (the Acquirers) of the 74% stake held by the Bharti Group in each of two joint venture insurance companies...
Combination Regulations Under Indian Competition Law
(The following post is contributed by Rahul Singh) The Competition Commission of India (the “CCI“) has on 11 May, 2011 notified the Competition Commission of India (Procedure in regard to the transaction of business relating to combination) Regulations, 2011 (No 3 of 2011) (“Combination Regulations“) under the Competition Act, 2002 (the Competition Act). Background...
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