Takeover Regulations 2011

 Control deals Tender offers 2019 - Takeover regulations

Control deals are gaining popularity because of the ability of the incoming controlling shareholder to control the ‘when’ and ‘how’ of the functioning of the business that is housed in the company. Additionally, the stigma associated with promoter’s relinquishing control of their companies is on the wane in India. Despite the market conditions, 2019 saw a fair deal of control transactions in the country. For such category of deals, calendar year 2019 was comparable to calendar year 2018 in number and value terms.

In this blog, we are sharing with you our analysis of control transactions in which exit was offered to public shareholders through the tender offer route in 2019[1], under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations). We will be sharing a detailed report on the 2019 activity of such transactions separately.
Continue Reading Control Deals Involving Tender Offers: Flashback 2019

Schemes and the Amendment to the Takeover Regulations

Schemes of arrangement have been a favoured route for corporates to acquire shares of listed companies, given the many obvious pros of acquisitions undertaken through a court/ National Company Law Tribunal (NCLT) based scheme of arrangement. Schemes have also been used to undertake group level restructurings, a consequence of which could be the indirect transfer of shares of a listed company from one group company to another.

One of the biggest advantages of acquiring shares in, and/or control over, a listed company pursuant to a scheme of arrangement is that such an acquisition is exempt from the requirements of making a mandatory open offer under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (Takeover Regulations), subject to certain conditions being met.
Continue Reading Schemes and the Amendment to the Takeover Regulations: A Step Backwards?

Financial investors in India are scared of regulatory uncertainties. Not that uncertainties are exclusive to our country but it’s a critical risk factor that is assessed by those making substantial investments. Historically, one of the most important regulatory concerns for such investors is related to being categorised as ‘promoter’ of a listed company, both when the company is going public and also in cases where a private equity (PE) player intends to take a control position in an already listed company, by replacing its present promoters or by becoming co-promoters. Promoter liability theories have kept such investors away from taking control positions in listed companies. On the contrary, in the unlisted space where the promoter position is perceived differently, control deals are a way of life for certain PE funds in India.

Continue Reading New Promoters on the Block: The Financial Investors