Tuesday, October 28, 2008
As per extent of provisions of the SEBI Takeover Code the acquire can acquirer upto 55% of shareholding of a listed Company under 5% creeping acquisition limit.
Vide PR No.239/2008 dated 27th October 2008 SEBI has decided that henceforth consolidation through creeping acquisition upto 5% be allowed to persons holding 55% and above but below 75%, subject to the condition that such acquisition can only be via open market purchases in the normal segment, and for the purpose, no consolidation via bulk/ block/ negotiated deal or through preferential allotment would be permitted.
Further, any increase in the holding of promoters pursuant to buy back, exemption under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations was required to be sought. It has now been decided to automatically exempt increase/ consolidation upto 5% per annum as a result of buy back by a company.
Necessary amendments to SEBI (Substantial Acquisition of Shares and Takeovers) Regulations are being carried out separately.
Conclusion:
Vide this amendment:
- In addition to creeping acquisition benefit upto 55%, the acquirer who is holding 55% or above not exceeding 75% can go for creeping acquisition upto 5% only through open market purchase AND no other route.
- When there is increase in shareholding of the promoter due to buy back of securities, such increase upto 5% per annum is permitted and no need to sought excemption from the SEBI.
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