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Simplifying M&As: Delisting with open offer

Simplifying M&As: Delisting with open offer

A reform highly sought in the listed M&A space has recently been undertaken by SEBI. In its September meeting, SEBI decided to align the takeover and delisting processes and do away with the complicated dual procedure that currently exists.

Under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, when the mandatory open offer obligation is triggered, an acquirer is required to make an offer for at least 26%. In cases where the acquirer already holds/acquires 49% or more of the target company, the additional 26% can take the total shareholding of the acquirer above the minimum public shareholding (MPS) threshold. The MPS law requires listed companies to have at least 25% non-control shareholding.

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