The much awaited and debated SEBI Takeover Code was finally announced at the SEBI Board meet in Mumbai on Thursday the 28th of July. The Code has three major changes which are as follows: –

• The trigger point or threshold limit has been changed from 15% to 25%. This means that if the person/entity or persons acting in concert acquire shares of 25% of the company, the open offer would have to be made.
• The size of the open offer has been increased from 20% to 26%. The earlier limit of offer has been changed as the threshold limit has been changed and it makes sense that the size of the open offer should be bigger than the threshold limit.
• The contentious issue of non-compete fee has been abolished. This is a demand which has been made by minority shareholders and it has been finally accepted.

What is important to note is that the recommendations of the committee were submitted a long time ago and they have been finally accepted though in parts only. This would have been a good opportunity to lay down the roadmap for how and when the rule from 26% size of open offer would be extended and become 75% (effectively all the shares).

There were other issues also discussed and the full press release is attached for your ready reference.
Please click here for SEBI Press Release.

SEBI has also decided that track record of merchant bankers would be disclosed in future IPO’s and the application form would be made smaller, simpler and space for filling of data be increased to facilitate ease of filling the same.