Upload
corporate-professionals
View
295
Download
0
Tags:
Embed Size (px)
Citation preview
Takeover Panorama A Monthly Newsletter by Corporate Professionals
Year VIII - Vol XI
January Edition
2
Legal Update
Consent order in the matter of M/s. Overseas Synthetics Limited
Consent order in the matter of M/s. Welspun India Limited
Adjudicating Officer/WTM Orders
3
Latest Open Offers
7
Regular Section
Acquisition Pursuant to a Scheme of Arrangement
9
Market Update
12
Our Team
13
Insight
3
Consent order in the matter of M/s. Overseas Synthetics Limited
SEBI had initiated adjudication proceeding against M/s Overseas Synthetics Limited
(“Applicant/OSL”) for the delayed compliance of provisions of Regulation 8(3) and
Regulation 7(3) of the SEBI (SAST) Regulations, 1997.
Pending the adjudicating proceeding, the Applicant has filed the consent application for the
settlement of above violations and proposed to pay a sum of Rs. 2,72,000 towards
settlement charges. The terms as proposed by the Applicant were placed before High
Powered Advisory Committee (HPAC) and on the recommendation of HPAC, SEBI settle the
above non compliances and disposes of said proceedings against the Applicant.
Consent order in the matter of M/s. Welspun India Limited
SEBI had initiated adjudication proceedings against M/s. Welspun India Limited
(“Applicant/WIL”) for the delayed compliance of provisions of Regulation 7(3) of the SEBI
(SAST) Regulations, 1997.
Pending the adjudicating proceeding, the Applicant has filed the consent application for the
settlement of above violation along with the violation of Regulation 13(6) of SEBI (PIT)
regulations, 1992 and proposed to pay a sum of Rs 2,41,500 towards settlement charges.
The terms as proposed by the Applicant were placed before High Powered Advisory
Committee (HPAC) and on the recommendation of HPAC, SEBI settle the above non
compliances and disposes of said proceedings against the Applicant.
LEGAL
UPDATES
4
Adjudicating/WTM orders
Target Company Noticee Regulations Penalty Imposed/
Decision Taken
M/s. Amar Remedies
Limited
Ms. Pratima Pravin Shah Regulation 31(1), 31(2) read
with Regulation 31(3) of SEBI
(SAST) Regulations, 2011 and
Regulation 13(4), 13(4A) read
with Regulation 13(5) of SEBI
(PIT) Regulations, 1992
Rs. 20,00,000
M/s. Amar Remedies
Limited
Mr. Sagar Pravin Shah Regulation 31(1), 31(2) read
with Regulation 31(3) of SEBI
(SAST) Regulations, 2011 and
Regulation 13(4), 13(4A) read
with Regulation 13(5) of SEBI
(PIT) Regulations, 1992
Rs. 35,00,000
M/s. Rama Paper
Mills Limited
Mr. Ashok Mittal Regulation 11(1) read with
Regulation14 of the SEBI
(SAST) Regulations, 1997
Case disposed off
M/s. Contech
Software Limited
Ms. Kajal R Vasa Regulation 7(1A) read with 7(2)
of SEBI (SAST)
Regulation,1997
Rs. 3,00,000
M/s. Contech
Software Limited
Ms. Pushpaben K Vasa Regulation 7(1) and 7(1A) read
with 7(2) of SEBI (SAST)
Regulation,1997
Rs. 2,00,000
M/s. Contech
Software Limited
Mr. Kahaan Vasa and
Mr. Karan Vasa
Regulation 3(4), 7(1), 7(1A)
read with 7(2) of SEBI (SAST)
Regulation,1997
Rs. 11,00,000
M/s. Asian Oilfield
Services Limited
M/s. Consolidated
Securities Limited
Regulation 7(1), 7(1A) read
with Regulation 7(2) and
Regulation 8(1) of SEBI (SAST)
Regulation, 1997
Rs. 10,00,000
M/s. Asian Oilfield Ms. Manju Gupta Regulation 7(1) read with 7(2) Rs. 5,00,000
5
Services Limited of SEBI (SAST)
Regulation,1997
M/s. Asian Oilfield
Services Limited
M/s. VSB Investments
Limited
Regulation 7(1) read with 7(2)
of SEBI (SAST)
Regulation,1997
Rs. 5,00,000
M/s. Gujarat Arth
Limited
Mr. Shiv Kumar
Agarwal, Ms. Rosydevi
Agarwal, M/s. Roselabs
Finance Limited, Ms.
Madhudevi Agarwal, M/s.
Singhal Overseas Ltd.
(Now Roselabs Limited),
M/s. Sadiram Industries
Limited (merged into
Roselabs Industries
Ltd.), Mr. Pawan Kumar
Agarwal and M/s.
Roselabs Limited.
Regulation 10, 7(1), 7(1A), 7(2)
of SEBI (SAST) Regulations,
1997 and Regulation 13(1),
13(3), 13(4) and 13(5)of SEBI
(PIT) Regulations,1992
Rs. 16,40,49,654
M/s. Pal and Paul
Builders Limited
M/s. Pal and Paul
Builders Limited
Regulation 8(3) of SEBI (SAST)
Regulations, 1997
Rs. 3,00,000
M/s. Empower
Industries India
Limited
Mr. Devang D. Master Regulation 10, 11(1), 7(1A) and
7(2) of SEBI (SAST)
Regulations,1997 read with
Regulation 13(4) and 13(5) of
SEBI (PIT) Regulations, 1997
and provisions of SEBI
(PFUTP) Regulations, 2003
Rs. 1,00,00,000
M/s. SITI Cables
Network Limited
Mr. Ashok Mathai Kurien,
Mr. Laxmi Narain Goel,
Ms. Sushila Goel and
M/s. Ambience Business
Services PrivateLimited
and others
Regulation 3(4) read with
Regulation 35of SEBI (SAST)
Regulations, 1997
Rs. 20,00,000
6
HINT OF THE MONTH
M/s. Vision Cinemas
Limited
Mr. Sanjay Kumar Regulation 29(1) read with
Regulation 29(3) of SEBI
(SAST) Regulation, 2011
Case disposed off
M/s. Vision Cinemas
Limited
Mr. Vishnu Vasanth, Ms.
Vinitha Vasanth, Ms.
Anita Vasanth, M/s.
Bindigannavale Ranga
Vasanth Kumar, S. I.
Media LLP, M/s. Vasanth
Color Laboratories
Limited
Regulation 7(1A) read with
7(2)ofthe SEBI (SAST)
Regulations, 1997
Case disposed off
Are there special provisions for determining the offer price in case of open offer arising out of indirect acquisition of a target company?
Yes. Since indirect acquisitions involve acquiring the target company as a part of a larger business, SAST Regulations, 2011 have prescribed additional parameters to be taken into account for determination of the offer price. If the size of the target company exceeds certain thresholds as compared to the size of the entity or business being acquired then the acquirer is required to compute and disclose in the letter of offer, the per share value of the target company taken into account for the acquisition, along with the methodology. (Kindly refer to Regulation 5). Further, in indirect acquisitions which are not in the nature of deemed direct acquisition, the offer price shall stand enhanced by an amount equal to a sum determined at the rate of 10% per annum for the period between the date on which primary acquisition was contracted and the date of Detailed Public Statement.
{As substantiated from FAQ of SEBI on SEBI Takeover Regulations, 2011}
{As substantiated from FAQ of SEBI on SEBI Takeover Regulations, 2011}
7
Target Company
M/s. Nirlon Limited
Registered Office
Mumbai
Net worth of TC
Rs. 152,577 Million
(31.03.2014)
Listed At
BSE Limited
Industry of TC
Misc. Commercial Services
Acquirer-
M/s. Reco Berry Private
Limited.
Target Company
M/s. GMM Pfaudler
Limited
Registered Office
Gujarat
Net worth of TC
Not available
Listed At BSE Limited
Industry of TC
Industrial Machinery
Acquirer
Pfaudler US Inc
(“Acquirer”) along with
Pfaudler Holding S.à r.l
(“PAC”).
Details of the offer:Offer to acquire 36,54,375 (25%)
equity shares at a price of Rs. 245.85/- per fully paid up
equity share payable in cash.
Triggering Event:Indirect Acquisition of 7,373,067
(50.44%)Equity Share of the Target Company.
Triggering Event:Share Purchase Agreement
(SPA) for the acquisition of 35,331,016 (39.21%) Equity
Shares of the Target Company.
Details of the offer:Offer to acquire 25,600,000 (28.41%)
equity shares at a price of Rs. 222/- per fully paid up equity
share payable in cash.
Latest Open
Offers
8
Target Company
M/s. Mangalore
Chemical and
Fertilizers Limited
Registered Office
Bangalore
Net worth of TC
Rs. 555.78 crores
(31.03.2014)
Listed At BSE, NSE and BgSE
Industry of TC
Fertilizers
Acquirer-
Mr. Zuari Fertilizers
and Chemicals Limited
(“Acquirer”) along with
Zuari Agro Chemicals
Limited (“PAC”)
Details of the offer:Offer to acquire 3,07,00,000
(25.90%) Equity Share at a price of Rs. 91.92/- per fully
paid up equity share payable in cash.
Triggering Event:Voluntary Open Offer
Triggering Event:Indirect acquisition of 1,132,653
(75%)Equity Shares of the Target Company.
Details of the offer:Offer to acquire 377,552 (25%)Equity
Shares at a price of Rs. 3440.43/- per fully paid up equity
share payable in cash.
Target Company
M/s. DISA India Limited
Registered Office
Bangalore
Net worth of TC
Not Available
Listed At
BSE Limited
Industry of TC
Industrial Machinery
Acquirer
Naciron A/S (“Acquirer”)
along with DISA Holding
AG and DISA Holding A/S
(“PACs”)
9
Regular Section: Acquisition Pursuant to a Scheme of
Arrangement
Regulation 10 of SEBI (SAST) Regulations, 2011 (SEBI Takeover Code) provides the
provisions relating to automatic exemption to the acquirer from complying with the provisions
of regulation 3 and 4 of the SEBI Takeover Code requiring Open Offer be made to the
shareholders of the Target Company subject to the compliance of the conditions as
prescribed thereunder. An analysis of the provision relating to exemption available in case of
increase in voting rights pursuant to a scheme of arrangement as contained in regulation
10(1)(d) is detailed below:
Increase in shareholding pursuant to Scheme of
arrangement
Involving Target Company
(As Transferee or Transferor Company)
Not Involving Target Company (As Transferee or Transferor
Company)
The cash consideration <25% of total consideration paid
under the scheme.
Persons directly or indirectly holding at least 33% of the voting rights in the combined entity are the same as the persons who held the entire voting rights before the implementation of
the scheme
10
Regulation 10 (1) (d) (ii)
“Acquisition Pursuant to a scheme of arrangement involving the target company as a
transferor company or as a transferee company, or reconstruction of the target company,
including amalgamation, merger or demerger, pursuant to an order of a court or a competent
authority under any law or regulation, Indian or foreign;”
The takeover offer is not triggered in case of acquisition of shares pursuant to any
arrangement as per the provisions of the Companies Act & in accordance with the foreign
law, if any applicable involving the Target Company as transferor or as transferee company.
The regulation specifically mentions amalgamation, merger & demerger. Therefore, if any of
the acquirer acquires shares or voting rights pursuant to a scheme of amalgamation beyond
the threshold limit prescribed then the acquirer is allowed to go beyond the prescribed limit
without takeover offer.
Regulation 10 (1) (d) (iii)
“Acquisition Pursuant to a scheme of arrangement not directly involving the target company
as a transferor company or as a transferee company, or reconstruction not involving the
target company’s undertaking, includingamalgamation, merger or demerger, pursuant to an
order of a court or a competent authority under any law or regulation, Indian or foreign,
subject to,—
(A) the component of cash and cash equivalents in the consideration paid being less than
twenty-five per cent of the consideration paid under the scheme; and
(B) where after implementation of the scheme of arrangement, persons directly or indirectly
holding at least thirty-three per cent of the voting rights in the combined entity are the
same as the persons who held the entire voting rights before the implementation of the
scheme.
Company B
(Transferor Co)
Company A
(Transferee Co-
Listed Target
Company)
Merged
Acquisition of shares of
Company A by the
shareholders of
Company B beyond the
threshold is exempt
from Open Offer
Issue of shares of
Company A to the
shareholders of Company
B
11
Acquisition of voting rights beyond the threshold pursuant to scheme of arrangement not
involving the Target Company would also be exempt from the requirement of Open Offer
provided that following conditions are complied with:
Component of Cash and Cash Equivalent < 25% of total consideration paid under the
scheme.
The persons who are holding 100% voting rights of the Transferee before the
implementation of the scheme should directly or indirectly hold atleast 33% of voting
rights in the Transferee (Combined entity after the Merger) after the implementation of
the scheme.
COMPLIANCES FOR AVAILING THE EXEMTION
Scheme of Arrangement involving
Target Company
Scheme of Arrangement not involving
Target Company
Regulation 10(6) – Any acquirer seeking
exemption shall file a report with the stock
exchanges not later than four working days
from the date of acquisition.
Regulation 10(6) – Any acquirer seeking
exemption shall file a report with the stock
exchanges not later than four working days from
the date of acquisition.
-
Regulation 10(7) - The Acquirer shall filea report
to SEBI within 21 working daysof the date of
acquisition along with supporting documents to the
Board giving all details in respect of acquisitions
and fee of Rs 1,50,000.
Before implementation of scheme
• Shareholdersholding 100%shares of theTransferee
After implementation of scheme
• Same shareholdersholds minimum 33%shares of theTransferee(Combined Entity)
12
Acquisition of stake in YourNest Angel Fund by Religare Global Asset
Management
Religare Global Asset Management has acquired a 26% stake in early stage VC fund,
YourNest Angel Fund for an undisclosed amount. Subsequent to the acquisition of stake in
YourNest Angel Fund, YourNest will become an affiliate of Religare Global Asset
Management which will generate synergy benefits.
Acquisition ofstake in Bokaro Jaypee Cement by Dalmia Bharat
Dalmia Bharat, the flagship company of the Dalmia Group has acquired 26% stake held by
Steel Authority of India in Bokaro Jaypee Cementthrough Shri Rangam Securities &
Holdings, an indirect wholly owned subsidiary of Dalmia Cement (Bharat) Limited, a
subsidiary of Dalmia Bharat at a price of Rs. 1,150 Cr.
Telstra Health Acquires Business of IdeaObject
Telstra Health, the e-Health business unit of Australia’s telecom and tech firm Telstra, has
acquired the business of Chennai based healthcare focused tech firm IdeaObject for an
undisclosed amount. Subsequent to the acquisition, IdeaObject will be merged with business
of Cloud9, the e-Health cloud software developer which Telstra Health had recently
acquired.
Market Updates
13
Disclaimer:
This paper is a copyright of Corporate Professionals (India) Pvt. Ltd. The entire contents of this
paper have been developed on the basis of SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 1997 and latest prevailing SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011 in India. The author and the company expressly disclaim all and any
liability to any person who has read this paper, or otherwise, in respect of anything, and of
consequences of anything done, or omitted to be done by any such person in reliance upon the
contents of this paper.
Visit us at
D- 28, South Extn. Part I New Delhi – 110049
T: 40622200 F: 91.40622201
A venture of
Our TEAM
OUR GAMUT OF SERVICES:-
Investment Banking;
Valuation & Business Modelling;
Merger & Acquisition;
Tax & Transaction Advisory;
ESOP/ESPS;
Domestic & Cross Border Investment
Structuring;
Group Reorganisation;
Corporate Funding;
Issue Management.
Manoj Kumar
D: +91.11.40622228
Divya Vijay
D: +91.11.40622248