{"id":1426,"date":"2020-06-25T17:52:37","date_gmt":"2020-06-25T12:22:37","guid":{"rendered":"https:\/\/blog.tickertape.in\/?p=1426"},"modified":"2020-06-25T18:11:53","modified_gmt":"2020-06-25T12:41:53","slug":"decoded-substantial-acquisition-of-stake-and-takeovers-regulations-2011","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/decoded-substantial-acquisition-of-stake-and-takeovers-regulations-2011\/","title":{"rendered":"Decoded: Substantial Acquisition of Stake and Takeovers Regulations, 2011"},"content":{"rendered":"\n

\u201cMajority wins\u201d is a widely accepted rule, be it among friends looking to choose a game to play on a weekend or when deciding a destination for an outing. Moreover, the rule also applies in the corporate world, when decisions related to a company are based on what the majority of shareholders<\/a> agree too.<\/p>\n\n\n\n

These decisions include mergers and acquisitions (M&A), a popular form of restructuring a company. Only, M&A has a significant impact on the affairs and management of the company to be merged (target company). That\u2019s when, \u201cMajority wins\u201d might suppress the rights\/interests of the minority shareholders and also result in mismanagement or poor corporate governance of the entity.<\/p>\n\n\n\n

But with the growing popularity of M&A as a form of restructuring companies in India, something had to be done to prevent hostile takeover resulting in the consequences for the company and its investors. That is why SEBI<\/a> introduced Substantial Acquisition of Shares and Takeovers Regulations, 2011 (SAST Regulations, 2011) in Sep 2011. This Regulation governs the substantial acquisition procedure so as to prevent hostile takeover of voting rights in a company and, in turn, ensure good corporate governance in the entity.<\/p>\n\n\n\n

However, such regulations restrict\/modulate the flow of capital in a company, which may not be feasible now, when companies are cash-strapped due to the pandemic and are looking for ways to survive and grow. Well, SEBI has amended the SAST Regulations, 2011 for the current year to support such companies. So, what gives? Let\u2019s learn that, important terms, and critical interpretations of the SAST Regulations, 2011 here.<\/p>\n\n\n\n

Note that, this article only explains the essence of the SAST Regulations 2011 in a simple and easy to understand manner. You can read the entire coverage of the SAST Regulations, 2011<\/a> here.<\/p>\n\n\n\n

The article covers:<\/strong><\/p>\n\n\n\n

Introduction to substantial acquisition or takeover<\/a><\/p>\n\n\n\n

SEBI Substantial Acquisition of Shares and Takeovers Regulations, 2011<\/a><\/p>\n\n\n\n

What is control?<\/a><\/p>\n\n\n\n

General rule of acquisition of shares in a target company<\/a><\/p>\n\n\n\n

What is an open offer?<\/a><\/p>\n\n\n\n

What is a trigger point?<\/a><\/p>\n\n\n\n

Significance of the SAST Regulations, 2011<\/a><\/p>\n\n\n\n

16th<\/sup> Jun 2020 modification to the SAST Regulations, 2011<\/a><\/p>\n\n\n\n

Significance of the SAST (Amendment) Regulations, 2020<\/a><\/p>\n\n\n\n

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Table of Contents<\/p>\n<\/span><\/div>\n