EDS says HP will not be required to make a tender offer for MphasiS under Sebi (Substantial Acquisition of Shares & Takeovers) regulations, 1997
Reason - Exemption contained in section 3(1)(j)(ii)
EDS statement clearly uses the word - We BELIEVE.
Sebi has not been approached as yet. Sebi will be approached once HP EDS merger happens. EDS holds 61% stake in MphasiS. Current deal sounds like an acquisition, which HP passing off as merger under scheme.
Precedent Exists
Concept of indirect acquisition explicitly introduced in the new Code
Sesa Goa was a similar case
Case pending in Supreme Court
Sebi's stand in such cases is 'What you can't do directly, you can't do indirectly'
Luxotica case too where Ray Ban was acquired world wide
Sebi said open offer is a must
Sesa Goa Case - 1997-98
Finco held 51% in Sesa Goa
Mitsui bought over Finco from Riva group to hold 51% in Sesa Goa
By Haresh Soneji, CNBC-TV18
