The Securities and Exchange Board of India, (SEBI) on Tuesday said that South African firm MTN Group Ltd (MTN) would not have to make an open offer to Sunil Mittal-promoted Bharti Airtel Limited (BAL) shareholders, as the transaction between two companies are through Global Depository Receipts (GDRs).
According to takeover regulations, a company that buys 15 per cent or more in a target company is required to make open offer to its shareholders.
In this transaction, though the share percentage is higher than 15 per cent, the SEBI exempted MTN from making an open offer as the transaction is in GDR and not the underlying equity. However, MTN would have to make an open offer upon conversion of the GDRs into equity shares with voting rights.
Under the proposed, complex$ 23 billion (Rs 1.12 lakh crore) merger, BAL will get a 49 per cent stake in MTN and the South African firm 36 per cent ‘economic interest’ in Bharti Airtel.