STAKE ABOVE 25% TO TRIGGER OPEN OFFER
The Takeover Regulations Advisory Committee (TRAC) report suggests the most significant changes to the SEBI.
- Open offer threshold raised to 25% from existing 15%
- Acquirer to make open offer for 100% equity, up from 20% now
- Creeping acquisition only for those holding over 25% stake
- Indirect control on voting rights over 25% to trigger open offer
- Those holding over 25% can make voluntary open offer for 10%
- Acquirer must state in advance if he intends to delist post offer
- Higher acquisition costs; only serious players will buy stakes
- Volume parameters to reduce chances of price manipulation
- With the 100% rule, all shareholders wishing to exit can sell out.