SEBI Takeover Regulations 2011
Bonanza for public shareholders
SEBI at their Board Meeting held on 28 July 2011, had considered the report of Takeover Regulations Advisory Committee [TRAC] and accepted most of the recommendations made by TRAC. SEBI has, on 23 September 2011, notified SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 [SAST 2011].
SAST aims at protecting interest of the investors in securities of a listed company providing amongst others, an opportunity for the public shareholders to exit where there is a substantial acquisition of shares or voting rights or control over a listed company, consolidation of holdings by existing shareholders and related disclosures and penalties for non- compliance etc. SAST requires an acquirer to make an offer to shareholders of the target company on acquiring shares exceeding stipulated thresholds. It also contains provisions relating to open offer size and price, time bound process for making an open offer, exemption from making an open offer etc.