Takeover code

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Querist : Anonymous

Querist : Anonymous (Querist)

07 September 2015 Kindly explain creeping acquisition & indirect acquisition of share of control

Amol S Joglekar

Amol S Joglekar (Expert)
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07 September 2015 Creeping acquisition refers to the purchase of company shares by its investors (usually, promoters or shareholders with significant holdings) over a number of small transactions, so as to increase the investors' stake in the company by an economically significant amount without requiring any disclosure or other action .

Amol S Joglekar

Amol S Joglekar (Expert)
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07 September 2015 SEBI has defined indirect acquisition or control as the ability to exercise or direct the exercise of voting rights which would otherwise attract the obligation of making a public announcement of an open offer. In case this ability exceeds 80 per cent of assets or net sales or market capitalisation of the target company, it would be deemed as a direct acquisition.

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Querist : Anonymous

Querist : Anonymous (Querist)

08 September 2015 Kindly explain creeping acquisition limit by using numerical example & thank you for your instant reply

Amol S Joglekar

Amol S Joglekar (Expert)
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08 September 2015 Take over code came into being w.e.f.22/10/2011
A 5% threshhold limit was prescribed for the promoters at the time of acquisition.

It is clarified that the quantum of acquisition of voting rights for the purpose of regulation 3(2) of the Takeover Regulations, 2011, shall be computed separately for every acquisition of voting rights based on the paid-up share capital of the target company at the time of acquisition and aggregated for the financial year.

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Querist : Anonymous

Querist : Anonymous (Querist)

09 September 2015 1. Is there any limit for indirect qcquisition of shares of control upto which an acquirer can acquire shareholding?

2. Maximum permissible non-public shareholding is 75% or not?

Amol S Joglekar

Amol S Joglekar (Expert)
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09 September 2015 You are right.

Please follow the link for a good clarification.
https://pxvlaw.wordpress.com/2011/10/08/sebi-substantial-acquisition-of-shares-and-takeovers-regulations-2011-%E2%80%93-some-key-features/