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Creeping Acquisition

Niki Shingade (Company Secretary) (83 Points)

15 December 2010

Hello Friends,

Can anyone please forward me a latest note on Creeping Acquisition?

Thanks in Advance

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6 Replies

HARDIK (COMPANY SECRETARY NCFM (Corporate Governance )) (664 Points)
Replied 15 December 2010

Creeping Acquisition:- upto 5 % per year limit prescribed in SAST Regulation.

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Niki Shingade (Company Secretary) (83 Points)
Replied 15 December 2010

Thanks Hardik, but what i wanted was a detailed note on the same.

ankit jain (CS trainee) (152 Points)
Replied 15 December 2010

Pls find the below mentioned attachment for the SEBI clarification on creeping acquisition

Attached File : 1 note on clarification by sebi on creeping acquisition under regulation 11 of the.pdf downloaded: 386 times

CS Ankur Srivastava (Company Secretary & Compliance Officer) (17853 Points)
Replied 15 December 2010

As per regulation 11 of the SEBI Substantial Acquisition of Shares & Takeovers) Regulations, 1997:-

Any acquirer who, together with persons acting in concert with him, has acquired, 15% or more but less than 55% of the shares or voting rights in a company, shall acquire, either by himself or through or with persons acting in concert with him additional shares or voting rights entitling him to exercise more than 5 % of the voting rights, in any financial year ending on 31^st March, unless such acquirer makes a public announcement to acquire shares in accordance with these regulations.

Accordingly, an acquirer who holds more than 15% but less than 55% shares or voting rights of a company can acquire 5 % voting rights of that company in a financial year without any public announcement.

No acquirer who together with persons acting in concert with him holds 55% or more but less than 75% of the shares or voting rights in a target company, shall acquire either by himself or through persons acting in concert with him any additional shares entitling him to exercise voting rights therein, unless he makes a public announcement to acquire shares in accordance with these regulations.

Accordingly, an acquirer who holds 55% or more but less than 75 % voting rights in a company can not acquire by himself or through PACs any additional voting rights unless he makes a public announcement.

Provided that such acquirer may, without making a public announcement under these regulations, acquire, either by himself or through or with persons acting in concert with him, additional shares or voting rights entitling him upto 5% voting rights in the target company subject to the following:-

The acquisition is made through open market purchase in normal segment on the stock exchange but not through buld dear or block deal or negotiated dear or preferential allotment or the increase in the shareholding or voting rights of the acquirer is pursuant to a buy back of shares by the target company.

The post acquisition shareholding of the acquirer together with persons acting in concert with him shall not increase beyond 75%.

Therefore, creeping acquisition of voting powers can only be made upto 5 % in a financial year only through open market normal segment dear.

Rajeev kumar Nayak (ACS) (283 Points)
Replied 15 December 2010

Hi,

provisions relating to creeping acquisition is as follows:

1. Between 15% or more but less than 55%-- upto 5% per financial year by any mode.

2. Between 55% to 75%--- upto 5% per financial year but subject to following conditions:

acquisition is made through open market purchase in normal segment.
acquisition will not be through bulk deal, block deal, preferential allotment, negotiated deal etc.
increase in holding not due to buy back of shares.

Thanks

Rajeev Nayak