Sebi tightens norms to check frivolous offers

In a notification,Sebi said: “An acquirer shall not withdraw an open offer pursuant to a public announcement made… even if the proposed acquisition through the preferential issue is not successful.”

Sebi said that a company can acquire the shares of the target company through preferential issue or through the stock exchange settlement process,other than through bulk deals or block deals,in case such shares being kept in an escrow account. However,the acquirer firm can not exercise any voting rights over such shares kept in this account.

The regulator said that these shares can be transferred from the escrow account to the acquirer after the expiry of 21 working days from the date of the detailed public statement,provided the acquirer deposits 100 per cent of consideration in the escrow account.

Sebi also said that where open offer obligations are triggered,the relevant date for making the public announcement and determination of offer price would be the earliest date on which obligations are triggered.