Securities Exchange Board of India (SEBI) vide Circular No. SEBI/HO/CFD/DCR2/CIR/P/2020/139 dated 27th July 2020 issued in exercise of powers conferred by Section 11(1) of the Securities and Exchange Board of India Act, 1992 has come out with Relaxations relating to procedural matters – Takeovers and Buy-back.
The Circular is issued to:
- All Listed Entities
- All Recognized Stock Exchanges
- All Registered Merchant Bankers
The Crux of the Notification:
- Previous Extension
SEBI vide Circular no. SEBI/CIR/CFD/DCR1/CIR/P/2020/83 dated May 14, 2020, granted one time relaxations from strict enforcement of certain regulations of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 and SEBI (Buy-back of Securities) Regulations, 2018 pertaining to open offers and buy-back through tender offers opening up to July 31, 2020.
Link of the circular dated 14.05.2020: https://www.sebi.gov.in/legal/circulars/may-2020/relaxations-relating-to-procedural-matters-takeovers-and-buy-back_46672.html
- Further Extension:
In view of the impact of the COVID-19 pandemic and the lockdown measures undertaken by Central and State Governments, based on the representations received from the market participants, the validity of relaxations, as provided by Circular No. SEBI/CIR/CFD/DCR1/CIR/P/2020/83 dated May 14, 2020, is further extended and shall be applicable for open offers and buy-back through tender offers opening up to December 31, 2020.
Key measures of SEBI/CIR/CFD/DCR1/CIR/P/2020/83 dated May 14, 2020
Service of the letter of offer and/or tender form and other offer related material to shareholders may be undertaken by electronic transmission as already provided under Regulation 18(2) of the Takeover Regulation and Regulation 9(ii) of Buyback Regulations subject to the following:-
- The acquirer/company shall publish the letter of offer and tender form on the websites of the company, registrar, stock exchanges, and the manager(s) to offer.
- The acquirer/company along with lead manager(s) shall undertake all adequate steps to reach out to the/its shareholders through other means such as ordinary post or SMS or audio-visual advertisement on television or digital advertisement, etc.
- Further, the Acquirer/ Company shall make an advertisement containing details regarding the dispatch of the letter of the offer electronically and availability of such letter of the offer along with the tender form on the website of the company, registrar and manager to the offer in the same newspapers in which (i) detailed pubic statement was published as per regulation 14(3) of Takeover Regulation or (ii) public announcements were published as per regulation 7(i) of Buy-back regulation.
- Further, the acquirer/ company may have the flexibility to publish the dispatch advertisement in additional newspapers, over and above those required under the respective regulations.
- The acquirer/ company shall make use of advertisements in television channels, radio, internet, etc. to disseminate information relating to the tendering process. Such advertisements can be in the form of crawlers/ tickers as well.
- All the advertisement issued should also be made available on the website of the company, Registrar, Managers to the offer, and Stock Exchanges.
Link of the Circular dated 27th July 2020:
IN NO EVENT THE AUTHOR SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM OR ARISING OUT OF OR IN CONNECTION WITH THE USE OF THIS INFORMATION.