India

Takeover Guide

Contact
Cyril Shroff

Amarchand & Mangaldas & Suresh A. Shroff

cyril.shroff@amarchand.com
Contents Page

BACKGROUND 1

TYPES OF TENDER OFFERS 2

OFFER SIZE, OFFER PRICE AND CONDITIONS FOR

WITHDRAWAL 5

TIMELINE FOR A MANDATORY TENDER OFFER 6

PERSONS ACTING IN CONCERT 8

EXEMPTIONS 9

DISCLOSURES 10

MINORITY SQUEEZE OUT AND DELISTING 10

_2014 - takeover guide - india

30760559_1
BACKGROUND
1. Regulatory Background

The regulation of takeovers of listed companies in India is set out in the Securities Exchange
Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011 (the
Takeover Regulations). The applicable minimum level of public shareholding required to be
maintained by a listed company is determined in accordance with the Equity Listing Agreement
(which is executed by the listed company with every stock exchange on which its equity shares
are listed) read with the Securities Contracts (Regulation) Rules, 1957 (the SCRR). The
delisting of listed securities is governed by the SCRR and the Securities and Exchange Board of
India (Delisting of Equity Shares) Regulations, 2009 (the Delisting Regulations). Pursuant to
a successful delisting, the acquisition of shares through a compulsory squeeze out process is
set out in Section 236 of the Companies Act, 2013 (which is pending notification).

The SCRR, Takeover Regulations, and Delisting Regulations are primarily administered by the
Securities and Exchange Board of India (the SEBI), which is the regulator of the Indian
securities markets and has been established as a statutory authority under the Securities and
Exchange Board of India Act, 1992. Compliances under the Equity Listing Agreement are
monitored and administered by the relevant stock exchanges under the supervision of SEBI.

The Takeover Regulations came into effect on October 22, 2011, repealing and replacing the
Securities and Exchange Board of India (Substantial Acquisitions of Shares and Takeovers)
Regulations, 1997 (1997 Takeover Regulations).

The Takeover Regulations are premised on the principles of fairness, equity and transparency,
and are based on the following fundamental objectives:

To provide a transparent legal framework for facilitating takeover activities;

To protect the interests of shareholders in securities and the securities market, taking into
account that the acquirer and the other shareholders need a fair, equitable and
transparent framework to protect their interests;

To balance the various, and at times, conflicting objectives and interests of various
stakeholders in the context of substantial acquisition of shares in, and takeovers of, listed
companies;

To provide each shareholder an opportunity to exit its investment in the target company
when a substantial acquisition of shares in, or takeover of, a target company takes place,
on terms that are not inferior to the terms on which substantial shareholders exit their
investments;

To provide acquirers with a transparent legal framework to acquire shares in, or control of,
the target company and to make an MTO;

To ensure that the affairs of the target company are conducted in the ordinary course when
a target company is the subject matter of an MTO;

To ensure that fair and accurate disclosure of all material information is made by persons
responsible for making them to various stakeholders to enable them to take informed
decisions;

To regulate and provide for fair and effective competition among acquirers desirous of
taking over the same target company; and

_2014 - takeover guide - india

30760559_1 page | 1
 To ensure that only those acquirers who are capable of actually fulfilling their obligations
under the Takeover Regulations make MTOs.

2. Scope and Applicability

The Takeover Regulations govern any direct or indirect acquisition of shares or voting rights in a
target company, or direct or indirect acquisition of control over a target company. Any acquisition
of securities which entitle the holder to exercise voting rights in the target company (including
shares underlying depository receipts, which receipts carry an entitlement to exercise voting
rights) are covered by the provisions of the Takeover Regulations.

Broadly, a target company is a company whose shares are listed on a stock exchange which
has been granted recognition under the Securities Contracts (Regulation) Act, 1956. There are,
at present, 21 recognized stock exchanges in India.

The Takeover Regulations contemplate various types of tender offers, for which it prescribes
distinct (but sometimes overlapping) regimes. The Takeover Regulations also set out some
exempted transactions, which do not attract mandatory tender offer obligations, and the
conditions under which such exemptions would apply.

In addition, the Takeover Regulations prescribe certain reporting and disclosure requirements
for holders of equity shares or voting rights in a target company, which are either event-based or
periodic in nature.

TYPES OF TENDER OFFERS

Primarily, the Takeover Regulations deal with three types of tender offers: (a) tender offers which are
mandatory in nature and are triggered on the occurrence of specified circumstances (Mandatory
Tender Offers or MTOs); (b) voluntary tender offers by an acquirer (Voluntary Offers); and (c)
competing offers made during the pendency of an existing tender offer.

1. Mandatory Tender Offers

The Takeover Regulations prescribe certain circumstances where an acquirer is obligated to

make a Mandatory Tender Offer to the shareholders of the target company to acquire at least
26% of the shares of the target company. These triggers are described below:

1.1. Initial Trigger

Any acquirer acquiring shares or voting rights, which taken together with shares or voting rights
already held by such acquirer along with persons acting in concert (PACs) with him, entitles
them to exercise 25% or more of the voting rights in the target company, is required to make a
Mandatory Tender Offer. The concept of PACs is discussed later.

1.2. Consolidation Trigger

Any acquirer who, together with PACs with him, holds 25% or more of the shares or voting rights
but less than the maximum permissible non-public shareholding limit in a target company, is
required to make a Mandatory Tender Offer on the gross acquisition, in a single financial year,
of more than 5% of the shares or voting rights of such target company.

The limit of 5% is calculated by aggregating gross acquisitions, i.e., without taking into account
any intermediate dilution in shareholding or voting rights.
1.3. Control Trigger

Irrespective of the extent of shares or voting rights held in the target company, any acquirer who
acquires, directly or indirectly, control over a target company is required to make a Mandatory
Tender Offer.

Any acquisition of control over an unlisted company which in turn controls a listed company in
India would be considered an indirect acquisition of control, and would trigger a Mandatory
Tender Offer.

Control under the Takeover Regulations is widely defined and includes the right to appoint a
majority of the directors of the target company, or to control the management or policy decisions
of the target company, whether individually or with PACs, directly or indirectly, including by
virtue of shareholding or management rights or shareholders agreements or in any other
manner. Control includes both de facto and de jure control. Since the test for control is not
defined by an objective shareholding threshold, acquisition of control is determined on a case-
by-case basis by assessing whether the acquirer can exercise control over the management or
policy decisions of the target company, whether through the exercise of contractual rights or
otherwise.

Unlike the 1997 Takeover Regulations, the Takeover Regulations do not distinguish between
varying degrees of control. Therefore, any cessation of control by a person in joint control with
an acquirer will not be considered an acquisition of control by the acquirer, and will not trigger a
Mandatory Tender Offer.

1.4. Trigger on Indirect Acquisitions

The Takeover Regulations also provide clear and specific guidance that indirect acquisitions of
voting rights and/or control in a target company will also trigger a Mandatory Tender Offer. An
indirect acquisition occurs when the acquirer acquires the ability to exercise or direct the
exercise of such percentage of voting rights in, or control over, the target company that would
trigger the initial, consolidation or control triggers described above.

E.g., the acquisition of 25% of the shares or voting rights in a holding company which holds 40%
of the shares or voting rights in a target company together with a minority representation on the
board of directors of the holding company would not constitute an indirect acquisition. However,
the acquisition of 70% of the shares or voting rights of the holding company simpliciter, or the
acquisition of 30% of the shares or voting rights along with control rights in a holding company
which holds 26% of a target company would trigger Mandatory Tender Offer obligations.

Where the acquisition of the target company in India is only an incidental element of an
international transaction, some leeway in relation to the tender offer process has been provided
to the acquirer. In such situations, the acquirer can formally launch the Mandatory Tender Offer
after the international transaction has been consummated and is eligible to price protection in
relation to the price payable under such Mandatory Tender Offer (subject to a 10% interest
payment requirement). The Takeover Regulations stipulate an objective test for what would
constitute a genuine indirect acquisition, i.e., where the acquisition of the target company is
incidental to the international acquisition and the target company not a predominant part of the
business being acquired. Therefore, this relaxation in the Mandatory Tender Offer process is
available where the proportionate net asset value/sales turnover/market capitalization of the
Indian target company does not exceed 80% of the entity or business being acquired under the
primary (international) acquisition.

Where the Indian target company is a predominant part of the entity or business being acquired,
based on the 80% test described above, the transaction will be treated as a direct acquisition
for the purposes of making a Mandatory Tender Offer under the Takeover Regulations.
2. Voluntary Offers

The Takeover Regulations provide a distinct regime for acquirers to make Voluntary Offers to
public shareholders. A Voluntary Offer may be made by an existing shareholder or an acquirer
who holds no shares in the target company.

The launch of a Voluntary Offer is subject to the fulfilment of certain conditions. Therefore, if any
acquirer or PACs with such acquirer has acquired any shares or voting rights of the target
company without attracting a Mandatory Tender Offer in the preceding 52 weeks, then such
acquirer will not be permitted to launch a Voluntary Offer. In addition, an acquirer who has
launched a Voluntary Offer is not permitted to acquire any shares of the target company during
the offer period other than under such tender offer.

An acquirer who has launched a Voluntary Offer is also not permitted to acquire shares of the
target company for a period of 6 months after the completion of the Voluntary Offer, except
under another Voluntary Offer. This does not prohibit the acquirer from launching a competing
offer under the Takeover Regulations.

3. Competing Offers

A competing offer is required to be made within 15 business days of the original tender offer. A
competing offer may be made by any person (i.e., whether it be an existing shareholder or
otherwise) without being subject to the restrictions applicable to Voluntary Offers.

There is a prohibition on a competing acquirer making an offer or entering into an agreement

that could trigger a Mandatory Tender Offer at any time after the expiry of the said 15 business
days and until completion of the original offer. Therefore, time is of the essence.

Once a competing offer has been launched, the two competing offers are treated on par and the
target company would have to extend equal levels of information and support to each
competing acquirer. A target company cannot favour one acquirer over the other(s) or appoint
such acquirers nominees on the board of directors of the target company, pending completion
of the competing offers.

A competing offer can be conditional upon a minimum level of acceptance only if the original
tender offer is also conditional. The losing competing acquirer is not permitted to sell the
shares acquired by him under the competing offer to the winner of the competing bid. Therefore,
any person making a competing offer will continue to be a shareholder in the target company,
even if his competing offer has failed.
OFFER SIZE, OFFER PRICE AND CONDITIONS FOR WITHDRAWAL
1. Offer Size

A Mandatory Tender Offer is required to be made for at least 26% of the total shares of the
target company, taking into account any potential increase in the total share capital during the
offer period.

A Voluntary Offer, launched by an acquirer holding between 25% and the maximum permissible
non-public shareholding in the target company, has to be made for at least 10% of the total
shares of the target company, and shall not exceed such number of shares as would, together
with the shares already held by the voluntary acquirer, breach the maximum permissible level of
non-public shareholding. The SEBI has also clarified that a Voluntary Offer launched by an
acquirer holding less than 25% of the share capital of the target company has to be made for at
least 26% of the total shares of the target company and may be made for the entire share
capital of the target company.

A competing offer has to be made for at least such number of shares as would be equal to the
shareholding of the original acquirer and PACs with him, the number of shares proposed to be
acquired under the original offer and under any agreements which may have triggered the
original offer, net the competing acquirers existing shareholding.

2. Offer Price

The Takeover Regulations embody the best price rule in determining the consideration payable
to shareholders under a tender offer. In this respect, the Takeover Regulations treat companies
whose shares are frequently traded and infrequently traded differently, and specify different
parameters for tender offers triggered by direct and indirect acquisitions.

Broadly, the minimum offer price for a Mandatory Tender Offer triggered by a direct acquisition
or for a Voluntary Offer would have to be the highest of the following:

the negotiated price;

the volume weighted average price paid or payable by the acquirer/ PACs during the 52
weeks immediately preceding the date of the tender offer;

the highest price paid by the acquirer/ PACs for any acquisition during the 26
weeks immediately preceding the date of the tender offer;

if the shares are frequently traded, the volume weighted average market price during the
60 trading days immediately preceding the date of the tender offer;

if the shares are infrequently traded, the fair price determined on the basis of parameters
which are customary for the valuation of shares of a company, such as book value and
comparable trading multiples.

In case of an indirect acquisition which satisfies the 80% test described above, the acquirer is
permitted to peg the Mandatory Tender Offer price to the above parameters prevailing on the
date that the primary (international) acquisition is announced or contracted, as opposed to the
date on which the Indian tender offer actually commences. However, such an indirect acquirer
will be required to pay 10% interest for the period intervening the date on which the primary
acquisition is announced or contracted and the date on which the detailed public announcement
for the underlying Indian target company is made (if more than 5 working days).

Indirect acquisitions also mandate a price attribution where the proportionate net asset
value/sales turnover/ market capitalization of the Indian target company represents more than
15% of the total value of the entity or business being acquired.
 The Takeover Regulations prohibit acquirers from making payments on the side to promoters or
selling shareholders in the form of non-compete fees, control premium or otherwise.
Specifically, all such incidental, contemporaneous or collateral payments are required to be
factored into the offer price in determining the consideration payable to shareholders under the
tender offer.

The best price rule also covers all acquisitions that are made subsequent to the tender offer,
and a price differential would have to be topped up if the acquirer makes the acquisition in the
following 26 weeks (except under a delisting offer or, in case of market purchases, on the
normal segment of the stock exchange).

3. Withdrawal of Tender Offers

The Takeover Regulations permit an acquirer to withdraw a tender offer in certain

circumstances, including the following:

if any statutory approvals required for the tender offer or for effecting the acquisition
triggering the tender offer have been finally refused; and

if any condition stipulated in the agreement for acquisition attracting the obligation to
make the tender offer is not met for reasons outside the reasonable control of the
acquirer, and such agreement is rescinded. SEBI has permitted conditions such as
completion of conditions precedent to the transaction within a specified long stop date
and material adverse change leading to the rescission of the agreement as valid grounds
for withdrawal. However, if a Mandatory Tender Offer is triggered by a preferential
allotment of equity shares of the target company to the acquirer, the acquirer is not
permitted to withdraw the tender offer on this ground even if the preferential allotment is
not successful.

The withdrawal of a tender offer on the aforementioned grounds is subject to specific

disclosures having been made in the tender offer documents. The Takeover Regulations also
provide SEBI the discretion to permit an acquirer to withdraw a tender offer. In such cases, the
acquirer is required to approach SEBI, which will then pass a reasoned order permitting the
withdrawal.

4. Conditional Tender Offers

Where a tender offer is conditional upon a minimum level of acceptances, the acquirer is not
bound to accept any shares tendered in such offer if the stipulated minimum level of acceptance
is not achieved. If the stipulated minimum level of acceptance is not achieved, the acquirer is
also not permitted to acquire any shares, voting rights or control under the definitive agreements
which triggered the Mandatory Tender Offer in the first place.

TIMELINE FOR A MANDATORY TENDER OFFER

Given below an abridged timeline for a mandatory tender offer triggered by the execution of an
agreement to acquire shares of a target company.

SL. ACTIONS START DATE

NO.
1. Public announcement to be sent to the relevant stock exchanges X (i.e., date of execution
on which target company is listed of agreement to acquire
shares)

2. Public announcement to be sent to the SEBI and to the target X + 1 working day
company at its registered office

SL. ACTIONS START DATE

NO.
3. Detailed public statement (DPS) to be published in specified X + (<)5 working days =
newspapers Y

4. Copies of the published DPS to be sent to the SEBI, all stock Simultaneously with Y
exchanges where target company is listed, and to target company
at its registered office.

5. Target company to constitute a committee of independent [On or about Y]

directors

6. Creation of escrow account by the acquirer as security for the Not later than Y-2
performance of its obligations under the Takeover Regulations

7. Filing draft letter of offer (the Draft Letter of Offer), along with Not later than Y+ 5
the specified non-refundable fee (by way of bankers cheque or working days
demand draft, payable in Mumbai in favour of SEBI)), with the
SEBI for its comments

8. Copies of the Draft Letter of Offer filed with the SEBI to be sent to Not later than Y+ 5
all stock exchanges where target company is listed and to target working days
company

9. SEBI to give its comments on the Draft Letter of Offer Not later than Y + 20
working days

(Assuming that the

SEBI has not sought
any clarifications from
the Acquirer or
manager to the MTO)

If SEBI has sought

clarifications, then the
period of issuance of
SEBIs comments shall
th
be extended to the 5
working day from the
date of receipt by SEBI
of satisfactory reply to
the clarification or
additional information
sought

10. Changes to be made to the Draft Letter of Offer based on any Not later than Y + 21
comments received from the SEBI (the Final Letter of Offer) working days

11. Dispatch of the Final Letter of Offer to all shareholders of target Not later than Y + 27
company, whose names appear on its register of members on the working days.
Identified Date

12. Identified Date Z 10

Note: Identified Date is the date falling on the tenth working day
prior to the commencement of the tendering period

SL. ACTIONS START DATE

NO.
13. Prohibition on the Acquirer or PACs acquiring or selling shares of Z 3 working days to Z
target company until expiry of the tendering period + 10 working days

14. Committee of independent directors to give its reasoned Not later than Z 2
recommendations on the MTO, and such recommendations to be working days
 published in all newspapers in which the public announcement
was published

15. Advertisement of schedule of activities including, inter alia, status Z 1 working days
of statutory and other approvals, status of unfulfilled conditions to
the MTO, if any, procedure for tendering acceptances

16. Commencement of tendering period Not later than Y + 32

working days = Z
Note: Tendering period is the period within which the
shareholders of target company may tender their shares in
acceptance of the MTO

17. Closure of tendering period Z + 10 working days

18. Completion of all activities in relation to the MTO, including Z + 20 working days
payment to all shareholders of target company who have tendered (completion of offer
their shares period)

PERSONS ACTING IN CONCERT

1. Significance of PACs

The concept of PACs is prevalent throughout the Takeover Regulations and is highly significant.
The shares or voting rights held by PACs are aggregated with those of the acquirer for the
purpose of computing triggers, shareholding and creeping limits under the Takeover
Regulations. Similarly, in determining whether an acquirer has acquired control of a target
company, it is pertinent to determine whether PACs with such acquirer exercise control over the
target company. The shareholding of PACs is also relevant in relation to various disclosure
obligations stipulated under the Takeover Regulations. PACs are also entitled to certain
exemptions from Mandatory Tender Offer triggers.

In addition, PACs with an acquirer have joint and several obligations under a tender offer. In
case of any tender offer launched under the Takeover Regulations, PACs with the acquirer are
not permitted to tender their shares.

2. Definition and Bright Line Tests

PACs are defined as persons who, with a common objective or purpose of acquisition of shares
or voting rights in, or exercising control over, a target company, pursuant to an agreement or
understanding, formal or informal, directly or indirectly co-operate for the acquisition of shares or
voting rights in, or control over, the target company.

To prove a concert relationship, the following four bright line tests must be satisfied:

one or more persons should have a common objective or purpose;

the common objective or purpose should be the substantial acquisition of shares or voting
rights in, or gaining control of, a target company;
 these persons should directly or indirectly co-operate by acquiring or agreeing to acquire
shares or voting rights in, or control of, such target company; and

such co-operation should be pursuant to a formal/informal agreement or understanding.

A PAC relationship can come into being only by design and not by accident, since the definition
presupposes the meeting of minds of two parties in relation to a common objective. However, a
PAC relationship does not depend on the existence of a pre-existing relationship; two strangers
may be PACs if they have the requisite common objective.

The onus of proving that two persons were, in fact, acting in concert with each other will be on
SEBI and it must establish that all of the above bright line tests were satisfied in a given fact
situation. The Supreme Court of India has also observed that evidence of actual concerted
acting is normally difficult to obtain and is not insisted upon. The standard of proof required to
establish a concert relationship is one of probability and such standard will be satisfied if, having
regard to the relationship between the parties, their conduct and their common interests, it may
be inferred that they must be acting together.

3. Deemed PACs

The Takeover Regulations also prescribe categories of persons who are deemed to be acting in
concert with each other. In such cases, the legal fiction that any two persons within the same
category are acting in concert prevails, and the onus of rebutting this legal fiction is on such
parties. Certain key categories of persons who are deemed to be acting in concert with each
other include:

company, its holding company, subsidiary company and any company under the same
management or control;

a company, its directors, and any person entrusted with the management of the company;

promoters and members of the promoter group;

a mutual fund, its sponsor, trustees, trustee company, and asset management company;

a venture capital fund and its sponsor, trustees, trustee company and asset management
company;

a portfolio manager and its client, who is an acquirer; and

banks, financial advisors and stock brokers of the acquirer, unless the banks sole role is
to provide normal commercial banking services or activities in relation to a tender offer.

EXEMPTIONS
The Takeover Regulations prescribe a rational and tiered approach to exemptions from Mandatory
Tender Offer obligations. Some transactions are exempt from the initial as well as consolidation
triggers, whereas others are only exempt from the consolidation trigger. Transactions which are
exempt from the initial and consolidation trigger include:

1. acquisitions pursuant to an inter se transfer of shares amongst qualifying persons, including

persons named as promoters of the target company in the shareholding disclosures filed
under the Equity Listing Agreement for not less than three years prior to the proposed
acquisition. SEBI has ruled that this exemption is not available to promoters of companies
which have been listed for less than three years;
 a company, its subsidiaries, its holding company, and other subsidiaries of such holding
company; and

persons acting in concert with each other for not less than three years prior to the
proposed acquisition, and disclosed as such in filings made under the Equity Listing
Agreement;

2. acquisitions in the ordinary course by:

a SEBI-registered underwriter by way of allotment pursuant to an underwriting agreement in

terms of the Securities and Exchange Board of India (Issue of Capital and Disclosures
Requirements) Regulations, 2009 (the ICDR Regulations);

a SEBI-registered stock broker on behalf of its client in exercise of lien over the shares
purchased on behalf of the client under the bye-laws of the relevant stock exchange;

a scheduled commercial bank (as classified by the Reserve Bank of India), acting as an
escrow agent;

invocation of pledge by scheduled commercial banks or public financial institutions (as

classified by the Reserve Bank of India) as a pledgee;

3. acquisitions under a scheme of amalgamation, merger or demerger pursuant to an order of a

court or other competent authority under any law or regulation, Indian or foreign, subject to
fulfilment of specified conditions;

4. acquisitions pursuant to a delisting in accordance with the Delisting Regulations; and

5. bailout takeovers of sick industrial companies undertaken pursuant to a scheme formulated by

an operating agency under the Sick Industrial Companies (Special Provisions) Act, 1985.

Any acquisition of shares, up to his entitlement, by a shareholder under a rights issue, any increase in
voting rights pursuant to a buy-back, and acquisition of shares in a target company in exchange for
shares of another target company tendered under a tender offer under the Takeover Regulations are
examples of acquisitions which are exempt from the consolidation trigger.

DISCLOSURES
An acquirer is required to disclose any acquisition of 5% or more of the voting rights in the target
company within two working days of such acquisition. An acquirer holding in excess of 5% would have
to disclose every acquisition or disposal of shares representing 2% or more of the shares or voting
rights in the target company. The acquisition of convertible instruments would also attract disclosure
requirements.

Promoters are required to make annual disclosures as of March 31 of every year. Promoters are also
required to disclose details of encumbered shares in the target company, where encumbrance has
been defined to include "pledge or lien or any other transaction which may result in a change in title to
the shares".

MINORITY SQUEEZE OUT AND DELISTING

Where the shares accepted in the tender offer by the acquirer results in the acquirers aggregate
shareholding exceeding the maximum permissible non-public shareholding threshold, the acquirer is
required to dilute its shareholding in accordance with the provisions of the SCRR to ensure that the
public shareholding in the target company is maintained at the stipulated threshold.
The Takeover Regulations do not permit an acquirer whose shareholding has breached the maximum
permissible non-public shareholding threshold pursuant to a tender offer to initiate a delisting of the
target company for a period of twelve months from the completion of the tender offer. Therefore, any
delisting of a target company will have to be undertaken through a two-step process, and the
framework of the Takeover Regulations does not contemplate an automatic going private regime. A
squeeze-out of minority shareholders is governed by the provisions of the Companies Act, 2013 and
the Delisting Regulations.

In terms of the Delisting Regulations, a voluntary delisting can be initiated only by a promoter (i.e.,
controlling shareholder). Therefore, a minority shareholder or a person who is not in control of the
target company cannot presently launch a delisting offer. Delisting is initiated through a delisting offer,
for which the procedure is prescribed in the Delisting Regulations.

The Delisting Regulations stipulate that a delisting offer will be successful only if the shares accepted
reach the higher of:

ninety per cent. of the total issued shares of the class of shares proposed to be delisted,
excluding the shares which are held by a custodian and against which depository receipts have
been issued overseas; or

the aggregate percentage of the promoters shareholding (along with persons acting in concert
with him) prior to the delisting offer and fifty per cent. of the size of the delisting offer.

It may be noted that persons acting in concert with the promoter are not permitted to tender their
shares in a delisting offer.

If the delisting offer is successful and the higher of the two parameters described above are met, the
target company will be delisted. Where the target company is delisted, any remaining public
shareholders holding shares in the target company are entitled to tender their shares to the promoter
within a minimum period of one year from the date of delisting. In such cases, the promoter is required
to accept the shares tendered at the same final price at which the shares were delisted.