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The New Takeover Code by the Securities and Exchange Board of India

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  • Varsha Das

Abstract

Merger & Acquisition in India have been governed by the age-old takeover rules. It seems that now, the Securities and Exchange Board of India (SEBI) has realized that these rules need to be revamped to keep them in line with the ever-changing global scenario. On September 2011, the SEBI amended the new set of takeover rules i.e.; the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The main purpose is to prevent hostile takeovers and at the same time, provide some more opportunities of exit to innocent shareholders who do not wish to be associated with a particular acquirer. With these rules coming into force, both promoter and public shareholders of a listed company would now get the same price for their shares being purchased by an acquirer. In another shareholder-friendly move, SEBI has scrapped the noncompete fee or control premium, which were being paid to only the promoters earlier and could have been as much as 25% of the public offer price. The SEBI has successfully done one part of the reform process by preparing the new takeover code, the other part requires it successful implementation.

Suggested Citation

  • Varsha Das, 2013. "The New Takeover Code by the Securities and Exchange Board of India," Journal of Social and Development Sciences, AMH International, vol. 4(7), pages 303-307.
    • Handle: RePEc:rnd:arjsds:v:4:y:2013:i:7:p:303-307
    DOI: 10.22610/jsds.v4i7.765
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