In contrast to the belief that the takeover code will make hostile bids by multinational companies common, most of the public offers made by MNCs have been either friendly takeovers or offers for consolidation.
According to the data collated by the Securities and Exchange Board of India (Sebi), of the total 71 public offers received, only 7 were hostile bids, while 45 were friendly takeovers and 19 were offers for consolidation.
MNCs made 19 offers out of which 9 were friendly takoevers and 8 were offers for consolidation. Two offers were a part of global restructuring.
Sebi received 188 cases for non-applicability of the takeover code, out of which 100 were inter se transfer, 84 were preferential allotment and 4 were rights issues.
Among the seven hostile bids, the bid for Raasi Cement by India Cements was the only successful one, while Sterlite's move towards Indal was an unsuccessful hostile bid. The offer for Nile by Gujarat Machinery Manufacturers is still 'being processed'.
Four cases are sub judice. These include offers for AEC Enterprises and AEC India by Peacock Chemicals, Saurashtra Cement by Autoriders, and Indo Gulf Industries by HB Portfolio Leasing. About 28 cases were referred to the takeover panel for exemption from making an open offer. Out of these, 6 were orders granting exemption, 16 were orders rejecting exemption, and 6 orders are yet to be passed.
A note has been forwarded to the Bhagwati Committee which is reviewing the 1997 Sebi Regulations.
"During the course of administering the 1997 regulations, certain new issues have come up for consideration. These include need for an increase in the creeping limit from the existing level of 2 per cent, acquisitions by persons holding more than 51 per cent, minimum offer size of conditional offers, and market purchases after the date of the public announcement," the note stated.
Regulations also require cases for exemption from the regulation to be referred to a takeover panel constituted for the purpose, which will give its recommendations to Sebi as to whether or not exemption should be granted. The review of the code will also take into account the role of the panel. The scope of the panel is expected to be enhanced to allow applicants to present their case before the panel.
