{"id":7232,"date":"2021-12-07T15:12:34","date_gmt":"2021-12-07T09:42:34","guid":{"rendered":"https:\/\/tradebrains.in\/features\/biz-sebi-delisting\/"},"modified":"2021-12-07T18:26:54","modified_gmt":"2021-12-07T12:56:54","slug":"biz-sebi-delisting","status":"publish","type":"post","link":"https:\/\/tradebrains.in\/features\/biz-sebi-delisting\/","title":{"rendered":"Sebi amends delisting rules to make M&#038;A more convenient"},"content":{"rendered":"<div class=\"trade-content_2\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-3568628326\"><p><a href=\"https:\/\/tradebrains.in\/get\/telegram\/\"><img decoding=\"async\" class=\"alignnone wp-image-101992\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2023\/01\/telegram-channel-300x119.png\" alt=\"\" width=\"148\" height=\"59\" \/><\/a> <a href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN3Epgswxc--Aw?hl=en-IN&amp;gl=IN&amp;ceid=IN%3Aen\"><img decoding=\"async\" class=\"alignnone wp-image-123430\" src=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png\" alt=\"follow-on-google-news\" width=\"222\" height=\"61\" srcset=\"https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-300x82.png 300w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news-150x41.png 150w, https:\/\/tradebrains.in\/features\/wp-content\/uploads\/2024\/05\/follow-on-google-news.png 468w\" sizes=\"(max-width: 222px) 100vw, 222px\" \/><\/a><\/p>\n<\/div><p><span style=\"font-weight: 400;\">SEBI has amended rules pertaining to the delisting of equity shares of a company following an open offer as part of efforts to make merger and acquisition transactions for listed companies more convenient.<\/span><\/p><div class=\"trade-content_7\" style=\"margin-left: auto;margin-right: auto;text-align: center;\" id=\"trade-2402976435\"><!-- Composite Start --> \r\n <div id=\"M923760ScriptRootC1549812\"> \r\n <\/div> \r\n <script src=\"https:\/\/jsc.mgid.com\/t\/r\/tradebrains.in.1549812.js\" async> \r\n <\/script> \r\n <!-- Composite End --><\/div><p><span style=\"font-weight: 400;\">Delisting occurs when a stock is removed from the stock exchange. It usually means that a stock has failed to meet the requirements of the exchange.<\/span><\/p><p><span style=\"font-weight: 400;\">Under the new framework, promoters or acquirers need to disclose their intention to delist the firm through an initial public announcement. If the acquirer is desirous of delisting the target company, they must propose a higher price for delisting with a suitable premium over the open offer price.<\/span><\/p><p><span style=\"font-weight: 400;\">In case the open offer is for an indirect acquisition, the open offer price and the indicative price will be notified by the acquirer at the time of making the detailed public statement and in the letter of offer.<\/span><\/p><div class=\"trade-content_5\" id=\"trade-3300567843\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_2_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"7925020301\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p><span style=\"font-weight: 400;\">In the existing framework, if an open offer is triggered, compliance with takeover regulations could take the incoming acquirer\u2019s holding to above 75 per cent or perhaps even 90 per cent.<\/span><\/p><p><span style=\"font-weight: 400;\">However, to ensure compliance with the Securities Contract (Regulation) Rules, the acquirer would be forced to first bring his stake down to 75 per cent as the SEBI delisting rules would not let the acquirer even attempt at delisting unless the holding is first brought down to 75 per cent.<\/span><\/p><p><span style=\"font-weight: 400;\">Such directionally contradictory transactions in a sequence pose complexity in the takeover of listed companies, especially where the acquirer desires to get the company delisted pursuant to his takeover.<\/span><\/p><p><span style=\"font-weight: 400;\">In the new framework, SEBI said that if the response to the open offer leads to the delisting threshold of 90 per cent being met, all shareholders who tender their shares would be paid the indicative price.<\/span><\/p><p><span style=\"font-weight: 400;\">In case the response to the offer leads to the delisting threshold of 90 per cent not being met, all shareholders who tender their shares would be paid the open offer price.<\/span><\/p><p><span style=\"font-weight: 400;\">If a company does not get delisted following an open offer under this framework, and the acquirer crosses 75 per cent due to the open offer, a period of 12 months from the date of completion of the open offer will be provided to the acquirer to make further attempts to delist the company using the reverse book building mechanism.<\/span><\/p><div class=\"trade-content-10\" id=\"trade-3581742965\"><script async src=\"https:\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js?client=ca-pub-4023722985638610\"\r\n     crossorigin=\"anonymous\"><\/script>\r\n<!-- in_content_3_news -->\r\n<ins class=\"adsbygoogle\"\r\n     style=\"display:block\"\r\n     data-ad-client=\"ca-pub-4023722985638610\"\r\n     data-ad-slot=\"2969612066\"\r\n     data-ad-format=\"auto\"\r\n     data-full-width-responsive=\"true\"><\/ins>\r\n<script>\r\n     (adsbygoogle = window.adsbygoogle || []).push({});\r\n<\/script><\/div><p><span style=\"font-weight: 400;\">Such further delisting attempt will be successful if 50 per cent of the residual public shareholding is acquired and the delisting threshold is met.<\/span><\/p><p><span style=\"font-weight: 400;\">If delisting during this extended 12-month period is not successful, the acquirer then must comply with the minimum public shareholding norm within12 months from the end of such period.<\/span><\/p><p><span style=\"font-weight: 400;\">If the acquirer at the time of open offer states upfront that it would opt for remaining listed, and the total stake at the end of the tendering period reaches above 75 per cent, then the acquirer may opt for either proportionately scaling down of purchases made under both, i.e. the underlying share purchase agreement and the shares tendered under open offer.<\/span><\/p><p><span style=\"font-weight: 400;\">The scaling down will be done in a manner that the 75 per cent threshold is never crossed or alternatively, the acquirer shall have to become compliant with minimum public shareholding within the time stipulated under the Securities Contract (Regulation) Rules, 1957.<\/span><\/p><p><span style=\"font-weight: 400;\">To give this effect, the Securities and Exchange Board of India (Sebi) has amended the SAST (Substantial Acquisition of Shares and Takeovers) Regulations. The new rules came into effect from Monday. This came after the board of SEBI approved a proposal in this regard in September.<\/span><\/p><div class=\"trade-after-content\" id=\"trade-40208415\"><div id=\"taboola-below-article-thumbnails\"><\/div>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({\r\n    mode: 'alternating-thumbnails-a',\r\n    container: 'taboola-below-article-thumbnails',\r\n    placement: 'Below Article Thumbnails',\r\n    target_type: 'mix'\r\n  });\r\n<\/script>\r\n<script type=\"text\/javascript\">\r\n  window._taboola = window._taboola || [];\r\n  _taboola.push({flush: true});\r\n<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>SEBI has amended rules pertaining to the delisting of equity shares of a company following an open offer as part of efforts to make merger and acquisition transactions for listed companies more convenient. Delisting occurs when a stock is removed from the stock exchange. It usually means that a stock has failed to meet the [&hellip;]<\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[1696,1513,31],"tags":[1813,1811,1812,1810,1814,1809],"class_list":["post-7232","post","type-post","status-publish","format-standard","hentry","category-corporate-action","category-editor-pick","category-news","tag-delisting-process","tag-delisting-regulations","tag-delisting-regulations-2021","tag-delisting-rules-in-india","tag-delisting-rules-sebi","tag-what-is-rule-of-delisting"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v20.5 (Yoast SEO v25.0) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Sebi amends delisting rules to make M&amp;A more convenient<\/title>\n<meta name=\"description\" content=\"SEBI has amended 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