Takeover Code Case Study

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1.1. Introduction It’s better to take over and build upon an existing business than to start a new one. - Harold S. Geneen It is with this thought of Harold Geneen that, as economies of the world began to integrate and open up to one another, companies across the globe are engaging in mergers and acquisitions in order to expand their horizons. Owing to the above, takeover laws have been enacted by most of the countries in order to stipulate a structured and coherent framework for acquisition of stake in listed companies. The core objective was to treat the shareholders of a listed company justly, without any prejudice; thereby protecting their interests during a takeover. India, respecting the international jurisprudence enacted the Securities…show more content…
One of the objectives of the Takeover Code is to provide the public shareholders an opportunity to exit their investment in the target company when a substantial acquisition of shares in, or takeover of the target company takes place, on terms that are not inferior to the terms on which substantial shareholders make their investments. Making of an “open offer” is a means to realize the above objective. In simple words, an open offer means making
an offer to buy shares from the public shareholders of the target company. Therefore, the Takeover Code obligates an acquirer, whose acquisition fulfills the prescribed conditions, to make a mandatory offer to acquire shares from the existing shareholders of the target company prior to consummating his…show more content…
Thus, they came up with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The main purpose is to prevent hostile takeovers and also provide opportunities of exit to innocent shareholders who do not wish to be associated with a particular acquirer. This article provides an overview of the Takeover Code, 2011. It highlights the new Takeover Code, 2011 that adheres to the framework and principles of the Takeover Code, 1997 and also discusses some of the most important amendments that have been brought about. The research methodology adopted throughout the article is doctrinal. The research is both descriptive and analytical. The researcher has used majorly secondary source of data from books, articles, websites, etc. (2) Talwar Karan and Nivedita Saksena, ‘Anti-Acquirer and Pro-Shareholder? An Analysis of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011’ (2012) 5 NUJS L. Rev. 129. This paper analyses the effect of the amendment introduced in the Takeover Code, 2011 on the acquirers and shareholders of the target company. The objective behind this paper is to analyze the possible implications of the new Takeover Code on the Indian capital market. The scope of the paper is confined to three fundamental recommendations

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