Govt, industry meet on takeover code
The finance ministry on Thursday held consultations with the industry representatives and other stakeholders on the proposed changes in the takeover code on mergers and acquisitions of companies.business Updated: Apr 21, 2011 23:12 IST
The finance ministry on Thursday held consultations with the industry representatives and other stakeholders on the proposed changes in the takeover code on mergers and acquisitions of companies.
The Takeover Regulations Advisory Committee chaired by chief economic advisor Kaushik Basu discussed the amendments in the code.
In July 2010, a Securities Exchange Board of India (SEBI) appointed panel headed by former Securities Appellate Tribunal (SAT) chairman C Achuthan had presented a draftof the new takeover code proposing sweeping changes that corporate acquisition norms.
The draft proposed increasing the threshold for an open offer from the current 15% to 25% The acquirer will have to make an open offer to buy 100% of a target company’s shares against the current 20 %.
The extent of the open offer that an acquirer would mandatorily need to make is a key area where discussions are still on. Another issue is that of the possibility of a company getting delisted after a 100% acquisition. It may be made mandatory for an acquirer to disclose upfront whether it plans to delist a company after acquiring it.
"Greater clarity is required on how this rule (100% open offer) would be applicable in the case of FDI caps in certain sectors," FICCI said.