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„
When an ³acquirer´ takes over the
control of the ³target company´, it
is termed as takeover. When an
acquirer acquires ³substantial quantity
of shares or voting rights´ of the Target
Company£ it results into substantial
acquisition of shares.

ΠFriendly Takeover: A situation in which a target
company's management and board of directors
agree to a merger or acquisition by another company.
ΠIn a 3
 
£ one company buys another
against its will.
Πr  
: Takeover of a financially sick
company by a financially rich company as per the
provisions of Sick Industrial.

.
 VISCLOSURE REQUIREV TO AVAIL EXEMPTIONS:
ACQUIRER STOCK EXCHANGE
{Report as in prescribed format
within 21 days of date of acquisition}
Visclosure is required only if the acquisition exceeds 15%
of voting shares capital of the company.
Fees of Rs 10£000/-
shall be accompanied along with the report.
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ÿ 1) Any person holding His aggregate Company Within 2 months of
more than 5% of shareholding in that notification of this
shares or voting rights company regulations or
of the company acquisition.
2) Company in which Aggregate number of All its stock exchange Within 3 months of
any person holds shares held by each of where its shares are notification of this
more than 5% of its the person in 1) listed. regulations
shares/ voting rights above
3) Promoter/ Person Number and Company Within 2 Months of
having control over a percentage of shares/ notification of this
company voting rights held by regulations
him and by persons
acting in concert with
him in that company

) Company whose Name and address of All its stock exchange Within 3 Months of
shares are listed on a promoters and where its share are notification of this
stock exchange persons having listed regulation
control over the
company; and
number and
percentage of shares
or voting rights held
by each such person
6
 
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Who Any acquirer£ who holds more than 5% or 10% or 1
% or 5
% or 7
% of shares or
voting rights in any manner whatsoever together with shares or voting rights
already entitled by him
What Aggregate of shareholdings or voting rights taken together with shares or voting
rights already held by entitles to more than 5% or 10% or 1
% or 5
% or 7
% in
any manner whatsoever.
When At every stage within 2 days of the receipt of intimation of allotment of shares or
the acquisition of shares or voting rights.
Whom To the company and to the stock exchange where the shares of the company are
listed.
6
 
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Who Any acquirer£ who has acquired shares or voting rights of a company under
regulation 11 1) and the purchase or sale aggregates to 2% or more of the share
capital of the company
What Purchase or sale aggregating 2% or more of the share capital of the company along
with the aggregate shareholding after such acquisition or sale.
When Within 2 days of such purchase or sale

Whom To the company and to the stock exchanges where the shares of the company are
listed.
6
 
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Who Company

What Aggregate number of shares held by each of such persons referred in Regulation
7 1) and 7 1A)
When Within 7 days of receipt of information under Regulation 7 1) and 7 1A)

Whom To the stock exchange

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Who Every person including a person mentioned in Reg.ÿ£ who holds
more than 15% shares or voting rights
What His holdings as on 31st March
When Yearly disclosures within 21 days from the end of the financial
year ending 31st March
Whom To the Company
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Who A promoter or every person having control over a company and
also by persons acting in concert with them.
What The number and percentage of shares or voting rights held by
them and also by persons acting in concert with them.
When Within 21 days from the end of the financial year ending 31st
March as well as the record date of the company for the purpose
of declaration of dividend
Whom To the Company
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Who Company

What The changes£ if any£ in respect of the holdings of the persons referred in regulation
8 1) and also holdings of promoters or persons having control over the company as
on 31st March
When Within 30 days from the end of the financial year ending 31st March as well as the
record date of the company for the purpose of declaration of dividend
Whom T all the stock exchanges where the shares of the company are listed.
ΠThe stock exchange and the Company shall
submit information relating to Regulation ÿ£7
and 8 to SEBI as and when required by the Board
ΠNo acquirer Shall acquire which when acquire in
single or in persons acting in concert with him
entitle such acquirer to exercise 15% or more of
the Voting rights in a company unless acquirer
makes a public announcement.
Œ No acquirer who£ together with persons acting in
concert with him£ has acquired£ in accordance
with the provisions of law£ ÿ15% 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 75%] of the voting
rights£ in any period of 12 months£ unless such
acquirer makes a public announcement to
acquire shares in accordance with the
regulations.
Œ No acquirer£ who together with persons acting in
concert with him has acquired £ in accordance with the
provisions of law£ 55% or more but less than 75% of the
shares or voting rights in a company£ shall acquire
either by himself or through persons acting in concert
with him any additional shares or voting rights£ unless
such acquirer makes a public announcement to acquire
shares in accordance with the regulations]
ΠControl on target company cannot cannot be
acquired unless public announcement for same
has been made.
ΠBefore making public announcement for
acquiring shares under regulation 10£11 and 12 an
acquirer must appoint Merchant Banker holding
a certificate of registration granted by Board and
merchant banker must not be associated with
acquirer or group of acquirer
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ΠThe Public announcement shall be made by the
merchant banker within four working days of
entering into agreement for acquisition of shares
exceeding the prescribed limits.
Œ The public announcement under reg 10£11 and 12
must be made in all editions one English
national daily£ one Hindi national daily and
regional language where the registered office of
the target company is located and at the place
where the shares are frequently traded.
ΠThe copy of same must be submitted to Board
through the merchant banker
ΠSent to all stock exchange where the shares of
the companies are listed
ΠSent to target company at its registered office
A Paid up share capital of the target company£ number of fully paid up
and partly paid up shares
A Percentage of shares proposed to be acquired
A Minimum offer price for each share
A Identity of persons having control over such company
A Existing shareholding of acquirer
A Existing shareholding of merchant banker in target company
A Highest and average price paid by acquirer or persons acting in concert
during 12 months preceding to date of public announcement
A Object and purpose of acquisition
A Specified date as mentioned in Regulation 19
A Vate by which the individual letters of offer would be posted to each of
the shareholder
A Vate of opening and closure of offer
A Vate by which the payment of consideration would be made for share
ΠThe public announcement must not contain any
misleading information
ΠWithin 1
days from the date of public
announcement acquirer shall through the
merchant banker file with the Board draft of
letter of offer which must be submitted to
shareholders within 21days from the date of its
submission to Board
ΠFees to be paid along with submission to Board
depending on the issue size
ΠThe public announcement shall specify the date for
determining the names of shareholders to whom the
letter of offer should be sent. The specified date cannot
be later than 30th day from the date of public
announcement
Π3
3
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"The minimum offer price
will be the highest of the following:
A The negotiated price as per the agreement
A The highest of the price paid by the acquirer or persons acting in concert with him for
any acquisition including by way of allotment or right issue during the 2ÿ weeks period
prior to date of public announcement
A The price paid by the acquirer under the preferential allotment to him or the person
acting in concert at any time during the 12 months period up to the date of closure of
offer
A The average of the weekly high and low of the closing prices of the shares of the target
company as quoted on the stock exchange during the 2ÿ weeks preceding to the date of
public announcement.
Ë 33
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: The minimum offer
price will be highest of the following:
A The first three points will be same as if the shares are frequently traded.
A The fourth point will be : price determined taking into consideration the factors like:
Net profit of the Company£ Earning per share £ book value of shares of the target
company.
ΠThe public offer made by the acquirer to the
shareholders of the target company shall be for
minimum 20% of the voting capital of the
Company
ΠThese three regulations deals with:
A Obligation of Acquirer 22)
A Obligation of Board of Virectors of the target
company. 23)
A Obligation of Merchant Banker 2
)
Œ Any person£ other than the acquirer who has
made the first public announcement £ can make
a public announcement within 21 days from the
date of first public announcement.
ΠAny competitive offer shall be for such number
of shares which when taken together with the
shares held by him along with person acting in
concert shall be at least equal to or more than
holding of first bidder.
ΠThe acquirer can at any time up to working days
prior to date of closure of offer. The revisions can
be in respect of following:
A Changes in original public announcement in all
newspapers where the original public
announcement was made
A Increasing the value of Escrow account
ΠNo public offer can be withdrawn except under
the following circumstances:
A The statutory approval s) required have been
refused
A The sole acquirer being a natural person has died
Ë Withdrawal must be subject to:
A Publish about the withdrawal in the newspapers
in which the offer for public announcement was
made
A Intimate to stock exchange£ Board and the target
company about such withdrawal
ΠThe acquirer must deposit in escrow account
such amount as security for performance of his
obligation. Amount of Escrow:
A Not subject to minimum level of acceptance:

p to 100 pto 100 crores : 25%

Crores: 25 % and 10% thereafter

A Subject to Minimum level of acceptance of 20%

than 50% of the consideration will be deposited.
ΠAmount of such sum payable must be deposited
within 7 days from the closure of offer with a
Banker to an issue registered with the Board
together with 90% of the amount lying in escrow
account
ΠFor acquisition of 15% or more of the shares or voting
rights.
ΠFor acquiring additional shares or voting rights to the
extent of 5% of the voting rights in any financial year
ending on 31st March if such person already holds not
less than 15% but not more than 55% of the shares or
voting rights in a company.
ΠFor acquiring control over a company
ΠSEBI Substantial Acquisition of shares and takeover)Regulation 1997
lay down the obligation of acquires target company and merchant
banker failure or non compliance of provision of the regulation by
them would entail penal consequences. The penalty may be i) for
future of the escrow account ii)directing the person concerned to sell
the shares acquired in violation of the regulation and not to further
deal insecurities iii) Levy of monetary penalties iv) prosecutions
proceding v) directing transfer of any proceeds to investor protection
fund of a stock exchange£ vi) debarring any person concerned from
accessing the capital market or dealing in securities for such a period as
may be directed by sebi board.
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