Voluntary Open Offer
The Concept of Voluntary Open Offer was not unknown and in the past there are number of Voluntary Open Offers, but there were no separate provisions governing the Voluntary Open Offers in SEBI (SAST) Regulations, 1997. However the New SEBI Takeover Regulations i.e. SEBI (SAST) Regulations, 2011 specifically deals with the Voluntary Open Offer.
“Voluntary Open Offer” means Open Offer given by the acquirer voluntarily without triggering the mandatory Open Offer obligations as envisaged under SEBI (SAST) Regulations, 2011. Generally, the purpose of giving Voluntary Open Offer is to consolidate the shareholding.
Regulation 6 of SEBI (SAST) Regulations, 2011 deals with the concept of Voluntary Open Offer and provides the eligibility, conditions and restrictions with respect to the same that are detailed below:
Eligibility for making Voluntary Open Offer
- Acquirer along with PACs should be holding atleast 25% or more shares in the Target Company prior to making voluntary Open Offer.
- The Acquirer or PACs have not acquired any shares of the Target Company in the preceding 52 weeks without attracting the Open Offer obligation.
Conditions for making Voluntary Open Offer:- The aggregate shareholding after completion of the Voluntary Open Offer should not exceed beyond the maximum permissible non-public shareholding.
Note: Maximum permissible non-public shareholding means such percentage shareholding in the target company excluding the minimum public shareholding required under the listing agreement
- No acquisition during the offer period except under the Voluntary Open Offer.
Restrictions
The acquirer becomes ineligible to acquire further shares for a period of six months after the completion of Open Offer except by way of:
- Another Voluntary Open Offer;
- Acquisitions by making a competing offer
For Instance:
SwarajAutomotives Limited (Target Company)
Ms. Divya Vijay
+911140622248,
Email:-divya@indiacp.com
