takeover code final ppt

7/27/2019 Takeover Code Final Ppt

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TAKEOVER CODE

Presented by

oNiveeta Meshram-12107A0

o Aditya Bhujbal-12107A003

o Samir Gopal-12107A0035

o Preeti Jain- 12107A0061


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Contents:

Introduction

Background of Takeover Regulations

SEBI (Substantial Acquisition of Shares and Takeover)Guidelines, 1997

Transition to the New Takeover Code, 2011

Impact on Industry

Case study


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Introduction

What is Takeover?

Takeover signifies a transaction or a series of transactions

company acquires control over the assets of the other company, eby becoming the owner of those assets or indirectly by obtainithe management of the company.

What does Code mean?

A set of rules outlining the responsibilities of or proper praindividual, party or organization.


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Background

The laws relating to takeovers in India where not very organized1994.

The guidelines of the Securities and Exchange board of Indiaacquisition of shares and takeover), 1994.

Finally in the year 1997 regulations were implemented and sregulations have been known as the TAKEOVER CODE.

Some changes have taken place in those regulations in the year 2TAKEOVER CODE was set up in the year 2011.


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SEBI (Substantial Acquisition of Shares and Takeov

Guidelines, 1997

The objective of the Takeover Code, 1997 was to regulate in an

the substantial acquisition of shares and takeovers of a company

quoted on a stock exchange i.e. a listed company.

Important Provisions of the Takeover Code, 1997:

Substantial Acquisition:

Substantial acquisition as such has not been defined under the reg

been defined in any other related Acts. Nevertheless, if we read t

10 and 11 of the code, the question as to what constitutes substa

made relatively very clear.


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Threshold of Disclosure to be made by Acq

5% and more shares or voting rights.

holding more than 15% but less than 55% shares.

dividend declaration.

The Target company, in turn, is required to inform all the

exchanges where the shares of target company are listed.


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Transition to the New Takeover Code, 201

The SEBI (SAST) Guidelines, 1997 formed under the guidance of the Justiceremained in force for a period of almost 13 years.

The New Takeover Code was the brainchild of the Takeover RegulaCommittee (TRAC) constituted under the Chairmanship of Shri. C. AcPresiding Officer, Securities Appellate Tribunal Chairman, who submittSEBI Chairman Shri. C. B. Bhave on July 19, 2010.

These Regulations had then been released by SEBI for Public comments from

to August 31, 2010.

SEBI at their Board Meeting held on July 28, 2011, had considered the repohad then, on 23 September 2011, notified SEBI (SAST) Regulations, 2011; a

New Takeover Code.

Finally, the New Code came into force on October 22, 2011.


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The New Takeover Code, 2011HIGHLIGHTS

Increase in Initial Threshold Limit from 15% to 25%

Creeping Acquisition Limit raised from 15%-55% to 25%-75%

Increase in Offer Size from 20% to 26%

Abolition of Non-compete fees

Definition ofControl modified

Deletion of Regulation 12 of the Old Takeover Code, 1997

Voluntary Open Offer

Eligibility

Conditions

Restrictions

Detailed provisions relating to Indirect Acquisitions

Provisions introduced relating to Recommendation on Open Offer by the Board of Targ

Reduction in timeline for completion of open offer (95 calendar days to 57 business day


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Impact on Industry & the way forward !

The impact of the New Takeover Code, which came into force on October 2industry can be analyzed by evaluating the positive and negative comments

professionals on the same describing its features and its effects on the field of co

Lesser number of Hostile Takeover Attempts.

Balance Interest of all stakeholders.

Increase in the Offer size which means exit opportunity to all the shareholders

More Stringent and frequent disclosure requirement on the part of the

... acquirer.

Clarity in Provisions.

a level playing field created for Indian acquirers by fixing the open offer size a


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Too Expensive for Indian Promoters due to insufficient bank funds

Effect on Promoter Holdings in the Company.

Disruptive Shareholders intention to block substantial shareholdin

Evidently, SEBI has carefully attempted to juggle the interest of allstrike a balance that is not very easy to achieve. As always, the mar

to be mixed ranging from excitement to displeasure.But what is certain is that the Indian takeovers scene is set to segood, bad and ugly.


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CASE STUDY ON

TAKEOVER CODE


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Mergers & Acquisitions


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Titaninternationalsettles takeovercode violationprobe with sebi.


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takeover code final ppt

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