While the company had framed a two-tiered process in which there would be two different resolutions, Sebi wants a single resolution, putting the entire transaction to vote at a go. A source said Sebi had given its observations to the National Stock Exchange and BSE, as their no-objection certificates were required for any structuring process to go through. Earlier, companies had to secure just a high court approval and a no-objection certificate from exchanges. However, in February this year, Sebi issued a circular directing all listed companies to seek its approval for any merger, demerger and amalgamation. The move was aimed at protecting minority interests, as several companies were found putting public shareholders in disadvantageous situations through complex restructuring processes.
The ACC-Ambuja deal was the first major one to seek the market regulator's approval.
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Sebi's move was a shot in the arm for small investors and their chances of stalling the deal, perceived as anti-minority, said people aware of the directive.
The transaction was to be executed through a merger of Holcim India Private Ltd (HIPL) with Ambuja. Currently, HIPL owns 9.76 per cent stake in Ambuja and 50.01 per cent in ACC. As part of a two-tiered process, Ambuja would first acquire 24 per cent in HIPL for Rs 3,500 crore in cash, and this would be followed by a stock merger between HIPL and Ambuja.
As part of the merger, Holcim would receive 584 million new equity shares of Ambuja, which would help the Swiss company raise its stake in Ambuja to 61 per cent.
Upon the merger, HIPL's 9.76 per cent holding in Ambuja would be cancelled.
According to the share-swap agreement, vetted independently by fairness committees and accounting firms, for every 74 shares in HIPL, Holcim would get 10 Ambuja shares.