Mumbai . There have been changes in the rules related to merger and acquisition of listed companies. The Securities and Exchange Board of India (SEBI) has tried to ease the earlier rules further. Under this, the rules related to delisting (removing from the stock exchanges) of the company’s equity shares have been changed after the open offer is brought.
According to the notification issued by SEBI, under the new rules, promoters or acquirer companies will have to initially disclose their intention to delist the shares of the company from the exchanges through a public announcement.
Trying to Make Acquisition Easier
If the acquiring company wishes to delist the shares of that firm, it will have to declare the removal of shares at a price higher than the price of the open offer. SEBI said, “If the open offer is for acquisition indirectly, the acquirer shall disclose the value of the open offer and the notional price, in the course of the public statement made in detail and at the end of the offer.”
Under the existing rules, if an open offer is triggered, the shareholding of the acquiring company, following the takeover rules, reaches 75 per cent or sometimes more than 90 per cent.
This makes mergers and acquisitions of listed companies more complicated. To reduce this complexity, SEBI has issued new rules. Under this, the open offer price should not be less than the minimum takeover price of the company.
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