The Securities and Exchange Board of India (SEBI) has notified the new takeover code. Minimum open offer size is raised to 26% from 20%, initial trigger threshold hiked to 25% versus existing 15%. The new norms will be applicable in 30 days.
In an interview to CNBC-TV18, Amrish Shah, partner of E&Y and Sandeep Parekh, founder of FinSec Law Advisors, discuss the new norms and give their outlook going forward. Also read: SEBI notifies new takeover norms; open offer trigger at 25% Below is the edited transcript of the interview. Also watch the accompanying video. Q: Could you wrap up the near-term impact, over the one month, before this comes into effect? Thereafter, what this could mean for M&A? Parekh: This will have big impact on the competitive landscape, basically for acquirers of control. It is going to benefit private equity investors who can go up much higher without shelling out money for an open offer. It will also impact certain type of promoters who had shareholdings below 25%, which they can now raise upto 25% and raise their control over the company upto that level. Ofcourse they have 5% more creeping, so they can go up to 30%. So, these two categories are dramatically impacted. And that which changes the landscape for all investors. If something triggers an open offer, it will result in offers being made to all minority shareholders. Secondly, the size of the offer is not a dramatic change from 20%. So, I donDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
