(2) No acquirer, who together with persons acting in concert with him, has acquired
and holds in accordance with these regulations shares or voting rights in a target
company entitling them to exercise twenty-five per cent or more of the voting
rights in the target company but less than the maximum permissible non-public
shareholding, shall acquire within any financial year additional shares or voting
rights in such target company entitling them to exercise more than five per cent
of the voting rights, unless the acquirer makes a public announcement of an open
offer for acquiring shares of such target company in accordance with these
regulations:
Provided that such acquirer shall not be entitled to acquire or enter into any
agreement to acquire shares or voting rights exceeding such number of shares as
would take the aggregate shareholding pursuant to the acquisition above the
maximum permissible non-public shareholding.
Explanation.—For purposes of determining the quantum of acquisition of
additional voting rights under this sub-regulation,—
(i) 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.
(ii) 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, the difference between the pre-
allotment and the post-allotment percentage voting rights shall be regarded
as the quantum of additional acquisition .
(3) For the purposes of sub-regulation (1) and sub-regulation (2), acquisition of
shares by any person,such that the individual shareholding of such person
acquiring shares exceeds the stipulated thresholds, shall also be attracting the
obligation to make an open offer for acquiring shares of the target company
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irrespective of whether there is a change in the aggregate shareholding with
persons acting in concert.
7
[(4) Nothing contained in this regulation shall apply to acquisition of shares or
voting rights of a company by the promoters or shareholders in control, in terms
of the provisions of Chapter VI-A of Securities and Exchange Board of India
(Issue of Capital and Disclosure Requirements) Regulations, 2009.]
Acquisition of control.
4. Irrespective of acquisition or holding of shares or voting rights in a target company,
no acquirer shall acquire, directly or indirectly, control over such target company
unless the acquirer makes a public announcement of an open offer for acquiring
shares of such target company in accordance with these regulations.
Indirect acquisition of shares or control.
5. (1) For the purposes of regulation 3 and regulation 4, acquisition of shares or voting
rights in, or control over, any company or other entity, 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, a target company, the
acquisition of which would otherwise attract the obligation to make a public
announcement of an open offer for acquiring shares under these regulations,
shall be considered as an indirect acquisition of shares or voting rights in, or
control over the target company.
(2) Notwithstanding anything contained in these regulations, in the case of an
indirect acquisition attracting the provisions of sub-regulation (1) where,—
(a) 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;
7
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2016,
w.e.f. 17-02-2016.
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(b) the proportionate sales turnover of the target company as a percentage of
the consolidated sales turnover of the entity or business being acquired; or
(c) 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, 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 obligations relating to timing, pricing and other
compliance requirements for the open offer.
Explanation.— For the purposes of computing the percentage referred to in
clause (c) of this sub-regulation, the market capitalisation of the target company
shall be taken into account on the basis of the volume-weighted average market
price of such shares on the stock exchange for a period of sixty trading days
preceding the earlier of, the date on which the primary acquisition is contracted,
and the date on which the intention or the decision to make the primary
acquisition is announced in the public domain, as traded on the stock exchange
where the maximum volume of trading in the shares of the target company are
recorded during such period.
8
[Delisting offer.
5A. (1) Notwithstanding anything contained in these regulations, in the event the acquirer
makes a public announcement of an open offer for acquiring shares of a target company in
terms of regulations 3, 4 or 5, he may delist the company in accordance with provisions of
the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009:
Provided that the acquirer shall have declared upfront his intention to so delist at the
time of making the detailed public statement.
8
Inserted by the SEBI (Substantial Acquisition of Shares and Takeovers) (Amendment) Regulations, 2015,
w.e.f. 24-03-2015.
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