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Five pc additional acquisition requires open offer, rules SEBI

The Securities and Exchange Board of India today amended its Regulation 11 of 1997 pertaining to substantial acquisitions of shares and takeovers to provide for increase in acquisitions from two per cent to five per cent for all persons holding above 15 per cent but below 75 per cent.

According to a SEBI release, the Bhagwati Committee reconstituted in this connection after examinations and discussions decided that the acquisition limit be increased from the present two per cent level to five per cent and that the five per cent creeping acquisition limit be made applicable even to persons holding above 51 per cent but below 75 per cent of a company's stake.

The sub-regulations 1 and 2 of Regulation 11 deals with the consolidations of holdings, threshold limit and acquisitions during the offer period.

The committee further decided that upon acquiring two per cent, disclosures should be made to the stock exchanges and any acquisitions beyond the five per cent limit shall mandate an open offer in terms of the regulations.

The threshold limit has also been revised upwards to 15 per cent and the SEBI release further added that the regulations will be suitably amended so as to permit acquisitions during the offer period upto the date of last revision.

UNI