Competing Offers under SEBI (SAST) Regulations, 2011

The term Competing Offers refers to an offer given by any other person (Competitor Acquirer) after an offer has already been given by an acquirer to the shareholders of the Target Company to acquire the shares held by them. 
E.g. If ‘A’ (Acquirer) has already given an Open Offer in terms of SEBI (SAST) Regulations, 2011 to the shareholders of X Ltd. (Target Company) and subsequently during the relevant period, B (any other person) also gives the similar offer to the shareholders of the Target Company, then offer given by B shall be termed as ‘Competing Offer’ in terms of these regulations.
Legal Provision
Regulation 20 of SEBI (SAST) Regulations, 2011 deals with the concept of Competing Offer. As per regulation 20 (1), Upon a public announcement of an Open Offer for acquiring shares of a Target Company being made, any person, other than the acquirer who has made such public announcement, shall be entitled to make a public announcement of an Open Offer within fifteen working days of the date of the detailed public statement (DPS) issued by the acquirer who has made the first public announcement.
Timing under Competing offers
Particulars
Period
Public announcement under Competing Offer
Within 15 working days of the date of DPS issued by the First Acquirer.
No Public announcement under Competing Offer or no acquisition of shares that would attract the obligation to make PA
After 15 working days of the DPS issued by the First Acquirer and until the expiry of the offer period under the said offer.
Upward revision of the offer price under Competing Offer
Upto 3 working days prior to the commencement of the tendering period.
Increase in offer size by the acquirer in case of voluntary offer

Within a period of fifteen working days from the public announcement of a
competing offer.
Comments of board on DLOO in respect of Competing Offer
SEBI shall provide its comments on the draft letter of offer in respect of each competing offer on the same day.
Publication of Recommendations  of the committee of Independent Directors

At least two working days before the commencement of the tendering period.

Size of competing offers
As per regulation 20 (2), the minimum number of shares for competitive offer shall be determined as under:
Highlights:
  • Competing offer can be made within 15 working days from the date of DPS made by the acquirer who makes the first PA. (Regulation 20 (1))
  • Unless the first open offer is a conditional offer, the competing offer cannot be made conditional as to the minimum level of acceptance. (Regulation 20 (6))
  • A competing offer is not regarded as a voluntary Open Offer and therefore all the provisions of SEBI (SAST) Regulations, 2011, including that of offer size, would also apply in case of Competing Offer. (Regulation 20 (3))
  • Upon PA of competing offer, an acquirer who had made a preceding offer is allowed to revise the terms of his open offer; if the terms are more beneficial to the shareholders of the target company. The upward revision of the offer price can be made any time up to three working days prior to commencement of the tendering period. (Regulation 20 (9))
  • No induction of any new director to the board of directors of the target company during the pendency of competing offers. Provided that in the event of death or incapacitation of any director, the vacancy arising therefrom may be filled by any person subject to approval of such appointment by shareholders of the target company by way of a postal ballot. (Regulation 24 (3))
Prepared by: Ms. Ruchi Hans

For any professional query, please contact:
Ms. Divya Vijay
+911140622248,
Email:- divya@indiacp.com

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