InvestorQ : What are the key changes to the Takeover Code that the SEBI has stipulated in its latest board meeting?
sara Kunju made post

What are the key changes to the Takeover Code that the SEBI has stipulated in its latest board meeting?

Answer
user profile image
3 months ago


SEBI has permitted acquisition of shares via bulk / block deals mode during open offer. In case of indirect acquisition of shares, the bidder will have to deposit 100% of total payable into an escrow account before making the public announcement of the same. This will prevent the practice of playing prices on information flows.

SEBI has exempted NCLT cases entirely from making an open offer to the remaining shareholders. This had been a bone of contention for acquirers looking to buy companies via the NCLT route. Most acquirers under the NCLT route found this rule to be unfair and a steeply higher financial burden on the acquirers.

Now SEBI has clarified that in the case of NCLT, the potential acquirers will not be required to make an open offer. This will be applicable to all cases of NCLT acquisitions, unlike in the past when it was more on a case-by-case basis. This is likely to make the NCLT process a lot more attractive for potential buyers and smoothen the process.