Takeover: Timing of Public Announcement under SEBI (SAST) Regulations, 2011

SEBI (SAST) Regulation, 2011 provides that whenever Acquirer acquires the shares or voting rights of the Target Company in excess of the limits prescribed under Regulation 3 and 4, than Acquirer is required to give a Public Announcement of an Open Offer to the shareholder of the Target Company. During the process of making the Public Announcement of an Open Offer, the Acquirer is required to give Public Announcement and publish Detailed Public Statement. The regulations have prescribed the separate timeline for Public Announcement as well as for Detailed Public Statement. 
  • Public Announcement 
  • Detailed Public Statement 
Timing of Pubic Announcement
The Public Announcement shall be sent to all the stock exchanges on which the shares of the target company are listed. Further, a copy of the same shall also be sent to the Board and to the target company at its registered office within one working day of the date of the public announcement. The time within which the Public Announcement is required to be made to the Stock Exchanges under different circumstances is tabulated below:

Applicable Regulation
Particulars
Time of making Public Announcement to Stock Exchange
13(1)
Agreement to Acquirer Shares or Voting Rights or Control Over The Target Company
On the same day of entering into agreement to acquire share, voting rights or control over the Target Company.
13(2)(a)
Market Purchase of shares
Prior to the placement of purchase order with the stock broker.
13(2)(b)
Acquisition pursuant to conversion of Convertible Securities without a fixed date of conversion or upon conversion of depository receipts for the underlying shares
On the same day when the option to convert such securities into shares is exercised.
13(2)(c)
Acquiring shares or voting rights or control pursuant to conversion of Convertible Securities with a fixed date of conversion
On the second working day preceding the scheduled date of conversion of such securities into shares.
13(2)(d)
In case of disinvestment
On the date of execution of agreement for acquisition of shares or voting rights or control over the Target Company.
13(2)(e)
In case of Indirect Acquisition where the parameters mentioned in Regulation 5(2) are not met
Within four working days of the following dates, whichever is earlier:
a.      When the primary acquisition is contracted; And
b.      Date on which the intention or decision to make the primary acquisition is announced in the public domain.
13(2)(f)
In case of Indirect Acquisition where the parameters mentioned in Regulation 5(2) are met
On the same day of the following dates, whichever is earlier:
a.    When the primary acquisition is contracted; And
b.  Date on which the intention or decision to make the primary acquisition is announced in the public domain.
13(2)(g)
Acquisition of shares, voting rights or control over the Target Company pursuant to Preferential Issue
On the date when the Special Resolution is passed for allotment of shares under Section 81(1A) of Companies Act 1956.
13(2)(h)
Increase in voting rights pursuant to a buy-back not qualifying for exemption under Regulation 10
Not later than 90th day from the date of increase in voting rights.
13(2)(i)
Acquisition of shares, voting rights or control over the Target Company where the such acquisition is beyond the control of acquirer
Not later than two working days from the date of receipt of such intimation.
13(3)
Voluntary Offer
On the same day when the Acquirer decides to make Voluntary Offer

Timing of Detailed Public Statement 
In terms of Regulation 13(4) of SEBI (SAST) Regulations, 2011, a Detailed Public Statement shall be published by the acquirer through the Manager to the Open Offer within maximum 5 working days from the date of Public Announcement. 
However in case of Indirect Acquisition where none of condition specified in Regulation 5(2) are satisfied, the Detailed Public Statement shall be published not later than five working days of the completion of the primary acquisition of shares or voting rights in or control over the company or entity holding shares or voting rights in, or control over the target company. 

Publication of Public Announcement and Detailed Public Statement 
Regulation 14 of SEBI (SAST) Regulation, 2011 provides the requirements relating to publication of Public Announcement and Detailed Public Statement which are tabulated below:
Regulation
Particulars
Time
To whom
14(1)
Public Announcement
On the same day
All the stock exchanges on which the shares of the target company are listed.
The stock exchanges shall forthwith disseminate such information to the public.
14(2)
Public Announcement
One working day of the date of the public announcement
Board and to the target company at its registered office
14(3)
Detailed Public Statement
5 working days from the date of Public Announcement.

Publication in the following newspaper:

(a)   One Hindi national language daily with wide circulation
(b)   One English national language daily with wide circulation
(c)   One regional national language daily with wide circulation language at a place where registered office of the company is situated.
(d)  One regional language daily with wide circulation at the place of the stock exchange where the maximum volume of trading in the shares of the target company is recorded during the sixty trading days preceding the date of the public announcement.
14(4)
Detailed Public Statement

A copy of ‘Detailed Public Statement shall be sent to followings:
(a)   Board
(b)   All the stock exchanges in which the shares of the target company are listed
(c)    The target company at its registered office

After the publication of Detailed Public Statement, the acquirer is further required to file with the Board a Draft of Letter of Offer within five working days from the date of Detailed Public Statement containing such information as may be specified along with non-refundable fees as prescribed by way of banker’s cheque or demand draft payable in Mumbai in favor of the Board.

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

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