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SEBI SAST

Regulations 2011
By P K Pandya & Co.
Practising Company Secretaries

SEBI SAST 1994

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SEBI SAST 1997

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SEBI SAST 2011

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© P K Pandya &

Definitions
 “Convertible Security” means a security which is convertible

into or exchangeable with equity shares of the issuer at a later
date, with or without the option of the holder of the security,
and includes convertible debt instruments and convertible
preference shares.
 “Enterprise Value” means the value calculated as market
capitalization of a company plus debt, minority interest and
preferred shares, minus total cash and cash equivalents
 “Identified date” means the date falling on the tenth working
day prior to the commencement of the tendering period, for the
purposes of determining the shareholders to whom the letter of
offer shall be sent
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 “Frequently traded shares” means shares of a target company

in which the traded turnover on any stock exchange during the
twelve calendar months preceding the calendar month in which
the public announcement is made, is at least ten per cent of
the total number of shares of such class of such target
company:
Provided that where the total share capital of the target
company is not identical throughout such period, the weighted
average number of total shares of the target company shall
represent the total number of shares.
 “Immediate Relative” means any spouse of a person, and
includes parent, brother, sister or child of such person or of the
spouse.
“Tendering Period” means the period within which shareholders
may tender their shares in acceptance of an open offer to
acquire shares made under these regulations;
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 “Offer Period” means the period between the date of entering

into an agreement, formal or informal, to acquire shares,
voting rights in, or control over a target company requiring a
public announcement, or the date of the public
announcement, as the case may be, and the date on which
the payment of consideration to shareholders who have
accepted the open offer is made, or the date on which open
offer is withdrawn, as the case may be.
 “Shares” means shares in the equity share capital of a target
company carrying voting rights, and includes any security
which entitles the holder thereof to exercise voting rights;
Explanation.— For the purpose of this clause shares will
include all depository receipts carrying an entitlement to
exercise voting rights in the target company;

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 A collective investment scheme and its collective investment management company. Associate Means: any immediate relative of such person.  person is a coparcener.  Immediate relatives. trustees and trustee company.  trusts of which such person or his immediate relative is a trustee.Additions to Persons Acting in Concert: Promoters and members of the promoter group. © P K Pandya & .  partnership firm in which such person or his immediate relative is a partner. and members of Hindu undivided families of which such.

© P K Pandya & .  “Promoter Group” has the same meaning as in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations. 2009. “Promoter” has the same meaning as in the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations. 2009 and includes a member of the promoter group.  “Volume Weighted Average Price” means the product of the number of equity shares bought and price of each such equity share divided by the total number of equity shares bought.  “Volume Weighted Average Market Price” means the product of the number of equity shares traded on a stock exchange and the price of each equity share divided by the total number of equity shares traded on the stock exchange.

500 Volume Weighted Average Market price = Product of (A and B) /Total of A =1663500/2300 =Rs.723.63.000 3.99.49.26 © P K Pandya & .15.000 2.000 5.300 Market Price per  Product of (A)  share (B) and (B) 500 667 898 450 999 1.100 4. No No.Example Volume Weighted Average Market price  Sr.00. of shares  traded(A) 1 2 3 4 5 TOTAL 200 300 500 700 600 2.00.400 16.

© P K Pandya & . of shares outstanding during the year = {[12 x 200.000. bought back or issued during the aforesaid period. “Weighted Average Number Of Total Shares” means the number of shares at the beginning of a period. 2011. multiplied by a time-weighing factor. 2011. of Shares 200.000 shares of A Limited were outstanding as 1st April. Weighted Average No. adjusted for shares cancelled.000 x 6]} / 12 = 250.000 equity shares on 1st Oct.000] + [100. Example Weighted Average No. The Company issued 100.

Indirect Acquisition of Control. Indirect Acquisition of Shares Direct Acquisition of Control.Modes Of Acquisition Direct Acquisition of Shares. © P K Pandya & .

Exemption by passing a special resolution has been done away © P K Pandya & .Direct Acquisition of Shares and Control Initial Trigger limits have been raised from 15% to 25% Multiple triggers at 55% & 75% have been done away Creeping acquisition limit has been retained at 5% Creeping acquisition can be done at the rate of 5% every year till the holdings reach 75% Open offer has been made mandatory when there is change in control.

But he will have to make an open offer. Example Mr. Mr. © P K Pandya & . 2011. He wants to acquire another 2% on 1st March. 2011 in open market. A acquires additional 2 % on 1st September.Following Explanations have been added:Gross acquisitions alone shall be taken into account regardless of any intermittent fall in shareholding or voting rights whether owing to disposal of shares held or dilution of voting rights owing to fresh issue of shares by the target company. 2010. He sold 4 % of his shares on 31st January. 2010 and another 3 % on 31st December. Can he do the same? Yes. A holds 20% and his wife holds 10 % of Equity Share capital of ABC Ltd as on 31st March 2010.

000 shares outstanding in the market.000 shares.In the case of acquisition of shares by way of issue of new shares by the target company or where the target company has made an issue of new shares in any given financial year. A. Mr. Calculate the % of additional acquisition by Mr. Case 1 XYZ Ltd has 1. A is allotted 5000 Shares and remaining 5000 are allotted to a FII. The company makes a further issue of 10.00. the difference between the pre-allotment and the post-allotment percentage voting rights shall be regarded as the quantum of additional acquisition . © P K Pandya & . Mr. A holds 30.000 shares.

A acquires 3000 shares prior to above allotment.000/110.000)*100} Additional Acquisition .81% Case 2 Suppose in Case 2 above Mr.31.54% = 4.1.54% So total additional Acquisition during the year is 3% {(3. Calculate the % of additional acquisition by Mr.54% © P K Pandya & .33% Post Allotment Holding .1.54% {(38.34.000)*100} +1.000/100. Pre Allotment Holding . A.000)*100} Additional Acquisition .000/110.81% {(35.Pre Allotment Holding -30% Post Allotment Holding .

A. acquisition of shares by any person. such that the individual shareholding of such person acquiring shares exceeds the stipulated thresholds. He acquires additional 4 % from Mrs. A holds 22% of Equity Share capital of ABC Ltd as on 31st March 2010.It has been further stated in Regulation 3(3) that:For the purposes of sub-regulation (1) and sub-regulation (2). shall also be attracting the obligation to make an open offer for acquiring shares of the target company irrespective of whether there is a change in the aggregate shareholding with persons acting in concert. Case 1 Mrs. A holds 10% and Mr. Whether he will have to make an open offer?   © P K Pandya & .

1 % from Mrs. A will have to make a PA as his individual holding increases beyond 5% creeping acquisition limit during the year. A will have to make a PA as his individual holding increases beyond 25%. © P K Pandya & . Case 2 Suppose Mr. He acquires additional 5.Mr. A has 18 % Shares of ABC Ltd instead of 22%. A. Whether he will have to make an open offer? Mr.

shall be considered as an indirect acquisition of shares or voting rights in. (1) For the purposes of regulation 3 and regulation 4. any  company  or other entity. the acquisition of which would otherwise attract the obligation to make a public announcement of an open offer for acquiring shares under these regulations. acquisition of shares or voting rights in. that would enable any person and persons acting in concert with him to exercise or direct the exercise of such  percentage  of  voting  rights  in. or control over.  or  control  over.  a  target  company.INDIRECT ACQUISITION OF SHARES OR CONTROL 5. or control over the target company © P K Pandya & .

A owns 5% and Mrs. It enables him to exercise voting rights of 27% over T Ltd. As 60% stake is a majority stake which enables the holder to influence the decisions of Z Ltd. he will have to make an open offer. As 20% stake is a minority stake which does not enable the holder to influence the decisions of H Ltd. Case 2 Mr.Case 1 H Ltd owns 60% of Equity Shares of T ltd. © P K Pandya & . Mr. A acquires 20% stake in H Ltd. A acquires 60% of Shareholding in Z Ltd which owns 12% in T Ltd. Whether he will have to make an open offer? No. he will not have to make an open offer. Will he be required to make an open offer? Yes. A holds 10% equity shares in T ltd. A holds 10% equity shares in T ltd. Mr. It does not enable him to exercise voting rights over T Ltd. Mr. A owns 5% and Mrs.

© P K Pandya & . pricing and other compliance requirements for the open offer.  the proportionate sales turnover of the target company as a percentage of the consolidated sales turnover of the entity or business being acquired. on the basis of the most recent audited annual financial statements. such indirect acquisition shall be regarded as a direct acquisition of the target company for all purposes of these regulations including without limitation.—  the proportionate net asset value of the target company as a percentage of the consolidated net asset value of the entity or business being acquired. in the case of an indirect acquisition attracting the provisions of subregulation (1) where.5 (2) Notwithstanding anything contained in these regulations. the obligations relating to timing. or  the proportionate market capitalisation of the target company as a percentage of the enterprise value for the entity or business being acquired. is in excess of eighty per cent.

Its owns 51% in A Ltd a Listed Company(Target).00%(850/1000 x 100). The Consolidated Turnover of XYZ Ltd is Rs. Proportionate NAV of A Ltd as a percentage of the consolidated NAV of XYZ Ltd is 85. © P K Pandya & . 1000 Crores. 3000 Crores and the Consolidated NAV is Rs.XYZ is an unlisted company. Proportionate Sales of A Ltd as a percentage of the consolidated sales of XYZ Ltd is 83. The Standalone Sales turnover of A Ltd is 2500 and its standalone NAV is 850 Crores. Hence this acquisition shall be Deemed as direct acquisition of A Ltd and hence all the requirement for direct acquisition shall be applicable.33% (2500/3000 x 100).

 The acquirer or PAC should not have acquired any shares by creeping acquisition or by any mode which is exempted during the 52 weeks preceding the PA.  The open offer shall be for minimum of 10% of outstanding shares. The acquirer shall not acquire any shares during the open offer otherwise than under the open offer. © P K Pandya & . 2.Voluntary Offer  The acquirer together with PAC must hold 25% or more equity shares or voting rights. However he can make another Voluntary offer or make a competing offer during the said period. The acquirer cannot acquire any shares for a period of six months after completion of open offer.  Compliances to be made if a voluntary open offer is made:1. However he can acquire shares by way of Bonus or Stock Split or an open offer.

© P K Pandya & . For the purposes of this Chapter. For the purposes of this Chapter.Disclosure Requirements Regulation 28 1. the term “encumbrance” shall include a pledge. and disclosures of such acquisitions and holdings shall be made accordingly. 3. the stock exchange shall forthwith disseminate the information so received. the  acquisition  and  holding  of any convertible security shall also be regarded as shares. 4. The disclosures under this Chapter shall be of the aggregated shareholding and voting rights of the acquirer or promoter of the target company or every person acting in concert with him. Upon receipt of the disclosures required under this Chapter. by whatever name called. lien or any such transaction. 2.

 Disclosure is to be made within 2 working days to the stock exchange and the target company. © P K Pandya & .  Once the holding crosses 5% every purchase and sale of aggregating to 2% shall have to be disclosed.  However Scheduled Commercial Banks and PFIs are exempt form disclosure requirements if they act as as pledgee in connection with a pledge of shares for securing indebtedness in the ordinary course of business.Event Based Disclosures  Initial disclosure shall be made when aggregate shareholding of acquirer along with PACs reaches 5%.  Creation of pledge or any other encumbrance shall be treated as acquisition and release of such pledge or encumbrance shall be treated as disposal and disclosures shall have to be made accordingly.

P. Then Mr. SEBI/CFD/DCR/SAST/ 2/2011/10/20 dated 20/10/2011. Case 2: Mr. Then Mr. A and Mr. A along with Mr. P needs to disclose their aggregate shareholding and voting rights to T Limited and BSE (where it is listed) on or before 03/11/2011 in the format Annexure  A given by SEBI in Circular no. A acquires 2% shares or voting rights of T Limited.   © P K Pandya & . A acquires 2% shares or voting rights of T Limited on 01/11/2011 which taken together with 4% shares or voting rights already held by him OR in association with Mr. On 01/11/2011 Mr.Case 1: Mr. A shall disclose such acquisition of 2 % shares to T Limited and BSE (where it is listed) on or before 03/11/2011 in the format Annexure B given by SEBI in Circular no. aggregates to more than 5% shares of T Limited. SEBI/CFD/DCR/SAST/ 2/2011/10/20 dated 20/10/2011. P holds 6% (5% or more) shares or voting rights of T Limited.

A already holding 6% shares in T Limited. A shall disclose such acquisition and Mr. X holding 10% shares in T Limited pledges 3% of his shares (shares taken by way of encumbrance shall be treated as an acquisition) to Mr. © P K Pandya & . Then Mr.Case  3:  On 01/11/2011  Mr. SEBI/CFD/DCR/SAST/ 2/2011/10/20 dated 20/10/2011. X such disposal (by way of encumbrance) of 3 % shares to T Limited and BSE (where it is listed) on or before 03/11/2011 in the format Annexure  B given by SEBI in Circular no.

Case 1: As on 31/03/2011 Mr.Continual Disclosures  These disclosures to be made by every person which together with PACs hold more than 25% of shares or voting rights in the target company and also the promoters of target company. A together with Mr. P holds shares of T Limited which entitles them to exercise more than 25% voting right in T Limited.  They have to disclose their aggregate shareholding and voting rights as of the thirty-first  day  of  March.  Disclosure to be made within 7 working days from the end of Financial Year to every stock Exchange where the shares of the Company are listed and to the Company. © P K Pandya & . in the Target Company.

is a Promoter of T Ltd. shall disclose their aggregate shareholding and voting rights as on 31/03/2011 to BSE and T Limited within seven working days from 31/03/2011. © P K Pandya & . Case 2: Mr.They shall disclose their aggregate shareholding and voting rights within seven working days from 31/03/2011 to BSE and T Limited. He and members of promoter Group and PACs. XYZ.

invocation or release of encumbrance to every stock Exchange where the shares of the Company are listed and to the Company.Disclosure of shares encumbered by Promoters  Every encumbrance of shares of target company by Promoters and PACs shall have to be disclosed.  Disclosure shall be made at the time of creation. invocation or release of encumbrance.  Disclosure to be made within 7 working days from creation. © P K Pandya & .

 Monitor the holdings of promoters. members of Promoter Group and PACs.Role of Company Secretary of a Listed Company  Identify and Categorise:o Promoter o Promoter group o Person in control o Persons acting in concert o Associates o Immediate Relatives  Ensure that timely disclosures are made by your promoters. © P K Pandya & . members of Promoter Group and PACs and take necessary action as required.

if applicable. Ensure that timely intimation is sent to stock exchanges in respects of transfers exempt under regulation 10. © P K Pandya & .  Ensure that timely reports are filed in respect of transfers exempt under Regulation 10 with Stock Exchanges and SEBI.

 Assist the management in appointment of competent Merchant Bankers and other intermediaries.Role of Company Secretary of an Acquirer  Conduct due diligence on the target company.  Check if provisions of Competition Act would apply and if applicable take action accordingly.  Consider all modes of acquisition permissible and advise the management accordingly on the best way to execute the transaction.  Thoroughly examine the takeover regulations and make a checklist and timeline for compliances.  Ensure that requisite approvals under Sec 372 and 293 and other applicable provisions of the Companies Act. © P K Pandya & . 1956 are in place.

 Since a lot of information such as pricing etc will become available at the last moment. Ensure that the pricing guidelines are complied with. © P K Pandya & . its is likely to be a very high pressure exercise.  Ensure that the obligations of the acquirer as specified in the regulations are complied with. Hence it is very important for the CS to maintain his cool and ensure that none of the requirements are missed.  Ensure that the requisite funds are kept ready and back up funding options are also in place.

Role of Company Secretary of a Target  Ensure that the obligations of the target as specified in the regulations are complied with. encumber.  To furnish the list of shareholders to the acquirer  Help the Board in sending the recommendation on open offer  Help the acquirer in verification of shares tendered in acceptance of open offer.  To advise the directors not to sell.  Place the copy of PA and Letter of offer before the board. transfer. or otherwise dispose off substantial assets of the company or its subsidiaries or issue or allot shares during the offer period unless a special resolution by postal ballot is passed. © P K Pandya & .

as of tenth working day from the closure of the tendering period. © P K Pandya & . which is not contemplated on the date of the public announcement then the offer size shall be proportionately increased.  If there is an increase in total number of shares. after the public announcement.Offer Size  The offer size under regulation 3 and regulation 4 shall be for at least twenty six per cent of total shares of the target company.  Obligation has been placed on the acquire to take into account all potential increases in the number of outstanding shares during the offer period contemplated as of the date of the public announcement.

A will have to make an open offer. Mr. 2011.05. © P K Pandya & . The Company also has 10. Hence he will have to make an open offer for 27300 shares.000 equity shares will have to be issued. 2011. T ltd has 100. The tendering period is from 1st November to 16th November. 2011 and shares will have to be issued immediately.000. The 26% shall be calculated on the enhanced no of shares i.Example:Mr. 2011.e 1. He has made a public announcement on 1st October. A wants to acquire 25% of equity share capital of T Ltd. The minimum size of the open offer shall be 26% total shares of the target company.000 Compulsorily Convertible Debentures outstanding against which 5.000 equity shares outstanding as on 1st October. They are due for conversion on 17th November.

PACs and the parties to any underlying agreement including deemed PACs of such parties cannot tender their shares in any open offer. © P K Pandya & .  This increase in the size of offer has to be made within 15 working days from the PA of competing offer.  If an competing offer is made against the Voluntary offer then the size of Voluntary offer can be increased to such amount as the first acquirer deems fit.  Once the size of voluntary offer is increased it will cease to be a voluntary offer and be considered a open offer under regulation 3(2). The Size of the voluntary shall be minimum 10% and shall not exceed such amount as would result in the post-acquisition holding of the acquirer and PACs exceeding the maximum permissible nonpublic shareholding.  the acquirer. failing to which he cannot increase the size.

during the twenty six weeks immediately preceding the date of the public announcement.  the highest price paid or payable for any acquisition. whether by the acquirer or by any person acting in concert with him.Minimum Price for Direct Acquisition 8(1)The Minimum offer price shall be the highest of following: the highest negotiated price per share of the target company for any acquisition under the agreement attracting the obligation to make a public announcement of an open offer.  the volume-weighted average price paid or payable for acquisitions. whether by the acquirer or by any person acting in concert with him. during the fifty-two weeks immediately preceding the date of the public announcement. provided such shares are frequently traded. © P K Pandya & .  the volume-weighted average market price of such shares for a period of sixty trading days immediately preceding the date of the public announcement as traded on the stock exchange where the maximum volume of trading in the shares of the target company are recorded during such period.

CBB Ltd has 10. and such other parameters as are customary for valuation of shares of such companies. Some purchases were made on stock exchange and some of them were made on privately form other shareholders © P K Pandya & . where the shares are not frequently traded. the price determined by the acquirer and the manager to the open offer taking into account valuation parameters including. and  the per share value computed under sub-regulation (5). book value. if applicable.000 shares outstanding.00.00. He purchased shares of CBB Ltd on as per details presented in the table given below. Example Mr A wants to take over CBB Ltd a Listed Company. comparable trading multiples.

000 Total © P K Pandya & 1.00.00.Date of  Price Paid per share No of Shares  Acquisition Acquired  15/03/2010 500 15.000 15/07/2010 700 5.00.00.00.000 15/05/2010 650 10.000 17/08/2010 750 10.000 12/09/2010 470 5.00.000 09/12/2010 900 10.00.000 .000 15/06/2010 450 25.00.00.00.000 09/11/2010 640 10.00.000 15/04/2010 550 5.000 06/10/2010 590 5.00.

H who holds 16% shares of CBB Ltd on 15th March. (Since 01/10/2010) Rs. 2011. 750 being the volume-weighted average market price of such shares for a period of sixty trading days immediately preceding the date of the public announcement. The public announcement was made on 1 st April. Calculate the minimum price payable in the open offer. The shares of CBB ltd are frequently traded. Rs. Rs. The Minimum open offer price shall be the Highest of following:Rs. 900 being the highest price paid for any acquisition during the twenty six weeks immediately preceding the date of the public announcement.764 being the Volume . © P K Pandya & . H.850 agreed to be paid to Mr. 2011 to purchase his entire shareholding at the rate of 850 per share.weighted average price paid for acquisitions during 52 weeks preceding the date of Public Announcement.He enters in to an agreement with Mr.

60.00.50.00.50.000 5.000 10.00.00.00.00.00.50.000 1.000 23.000 13.000 90.00.12.00.60.45.00.000 10.00.00.000 18.00.00.00.00.00.50.000 25.00.00.000 10.00.000 35.000 2.000 .00.00.000 10.000 65.00.000 5.00.Date of  Acquisition 15/04/2010 15/05/2010 15/06/2010 15/07/2010 17/08/2010 12/09/2010 06/10/2010 09/11/2010 09/12/2010 15/03/2011 Total © P K Pandya & Price Paid  No of Shares  per  Acquired (B) share(A) 550 650 450 700 750 470 590 640 900 850 5.00.000 Product (A x B) 27.00.000 5.00.00.000 64.00.000 29.000 75.000 1.82.

900 per share. between the earlier of.82.VWAP = 18.000/2.000 = 764 So the minimum price will be Rs. and the date on which the intention or the decision to make the primary acquisition is announced in the public domain.  Also the cut off date is date of contract or the date on which the intention or the decision to make the primary acquisition is announced in the public domain instead of date of PA. © P K Pandya & .00.45. However one additional criteria has been prescribed which is as follows: the highest price paid or payable for any acquisition. whether by the acquirer or by any person acting in concert with him. and the date of the public announcement of the open offer for shares of the target company made under these regulations. the date on which the primary acquisition is contracted. The Conditions for minimum price in case of Indirect Acquisitions are also same.00.00.

—  the proportionate net asset value of the target company as a percentage of the consolidated net asset value of the entity or business being acquired. be required to compute and disclose. along with a detailed description of the methodology adopted for such computation.8(5) In the case of an indirect acquisition and open offers under subregulation (2) of regulation 5 where. in the letter of offer. notwithstanding anything contained in sub-regulation (2) or sub-regulation (3). is in excess of fifteen per cent. the per share value of the target company taken into account for the acquisition.  the proportionate sales turnover of the target company as a percentage of the consolidated sales turnover of the entity or business being acquired. the acquirer shall. on the basis of the most recent audited annual financial statements. © P K Pandya & . or  the proportionate market capitalization of the target company as a percentage of the enterprise value for the entity or business being acquired.

Consolidated Sales is $8000 croresand Market Capitalization is $10. Since the Proportionate NAV.000 Crores.5% and 30% respectively the provisions of this sub regulation are attracted. in the letter of offer. along with a detailed description of the methodology adopted for such computation. Sales are $ 3000 Crores and Market Capitalization is $3. the per share value ascribed to Astra India when determining the price for acquisition of Astra Inc. Since there is an indirect acquisition of Astra India. Vertigo will have to make a open offer in India.000 Crores. sales and Market Cap of Astra India as a percentage of the consolidated NAV. Astra Inc is a company incorporated in USA.Example.000 Crores.000 Crores. Vertigo Inc. 37. © P K Pandya & .000. The Consolidate NAV of Astra Inc is $4. sales and Market Cap of Astra INC is 25%. acquires 51% in Astra Inc for $6. NAV of Astra India is $1. Hence Vertigo Inc is required to compute and disclose. It has a Subsidiary in India by the name of Astra India Limited which is listed on BSE and NSE.

whether by subscription or purchase. the offer price shall stand revised to the highest price paid or payable for any such acquisition: Provided that no such acquisition shall be made after the third working day prior to the commencement of the tendering period and until the expiry of the tendering period.Additional Pricing Provisions 8(6) If the acquirer or any PAC has any outstanding convertible instruments convertible into shares of the target company at a specific price. shall also be considered. © P K Pandya & . the price at which such instruments are to be converted into shares. 8(8) Where the acquirer has acquired or agreed to acquire whether by himself or through or with PACs any shares or voting rights in the target company during the offer period. 8(7) The price paid for shares of the target company shall include control premium or as non-compete fees or any other fee. at a price higher than the offer price.

not being negotiated acquisition of shares of the target company whether by way of bulk deals. the acquirer and persons acting in concert shall pay the difference between the highest acquisition price and the offer price. 2009. to all the shareholders whose shares were accepted in the open offer. or open market purchases made in the ordinary course on the stock exchanges. block deals or in any other form. © P K Pandya & . within sixty days from the date of such acquisition: Provided that this provision shall not be applicable to acquisitions under another open offer under these regulations or pursuant to the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations.8(10) Where the acquirer or persons acting in concert with him acquires shares of the target company during the period of twenty-six weeks after the tendering period at a price higher than the offer price under these regulations.

indicate a lower price. in the event the open offer does not receive the minimum acceptance. the acquirer may. which will not be less than the price determined under this regulation.8(11) Where the open offer is subject to a minimum level of acceptances. other than the indirect acquisition referred in sub-regulation (2) of regulation 5. and the date of the detailed public statement. © P K Pandya & . thereon. 8(12) In the case of any indirect acquisition. for acquiring all the acceptances despite the acceptance falling short of the indicated minimum level of acceptance. 8(13) The offer price for partly paid up shares shall be computed as the difference between the offer price and the amount due towards callsin-arrears including calls remaining unpaid with interest. the offer price shall stand enhanced by an amount equal to a sum determined at the rate of ten per cent per annum for the period between the earlier of the date on which the primary acquisition is contracted or the date on which the intention or the decision to make the primary acquisition is announced in the public domain. provided such period is more than five working days. subject to the other provisions of this regulation. if any.

both being frequently traded shares. © P K Pandya & . to the volume-weighted average market price of the shares carrying differential voting rights for a period of sixty trading days computed on the same terms as specified in the aforesaid provisions. that the offer price for the equity shares carrying full voting rights represents to the price parameter computed under clause (d) of sub-regulation 2.8(14) The offer price for equity shares carrying differential voting rights shall be determined by the acquirer and the manager to the open offer with full disclosure of justification for the price so determined. or as the case may be. subject to shares carrying full voting rights and the shares carrying differential voting rights. being set out in the detailed public statement and the letter of offer: Provided that such price shall not be lower than the amount determined by applying the percentage rate of premium. if any. clause (e) of sub-regulation 3.

© P K Pandya & . the Board may. The 60 Days VWAMP of ordinary shares is Rs. The offer price of ordinary shares is at a 30% premium to its 60day VWAMP. 65. 100 per share and for DVRs Rs. require valuation of the shares by an independent merchant banker other than the manager to the open offer or an independent chartered accountant in practice having a minimum experience of ten years. Hence the minimum price for DVRs will be Rs. 130 per share. at the expense of the acquirer. 8(16) For purposes of clause (e) of sub-regulation (2) and subregulation (4). The open offer price of Ordinary shares in Rs.Example ABC Limited has 2 classes of Equity shares namely Ordinary Equity Shares and DVRs. 50 per share. Calculate the minimum offer price for DVRs.