Pysunsmart Fire Protection Limited (PFPL) is a listed company on the Bombay Stock Exchange (BSE). It is engaged in the manufacture of industrial fire extinguishers. The company has seen a steady growth over the past few

When an acquirer takes over the control of the 'target company', it is termed as takeover. When an acquirer acquires 'substantial quantity of shares or voting rights' of the target company, it results into substantial acquisition of shares. The transaction relating to the acquisition of shares of a target company (listed company in India), undertaken by an existing shareholder of the company or any other independent acquirer company, is governed by the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("Regulations"). The Regulations' goal is to govern the direct or indirect purchase of shares, voting rights, or the "control" of the target firm and to make sure that such purchases are made in a just and open way. Its objective is to make the transactions relating to acquisition fairer and more transparent. A, B, C and Z will be required to follow the following regulations, the prescribed procedure and the timelines. Regulation 3(1) of the SAST Regulations provides for Substantial acquisition of shares or voting rights. It states that no acquirer shall acquire shares or voting rights in a target company which taken together with shares or voting rights, if any, held by him and by Persons Acting in Concert (PACS) with him in such target company, entitle them to exercise twenty-five percent or more of the voting rights in such target company unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations. Regulation 3(2) of the SAST Regulations provides that no acquirer, who together with persons acting in concert with him, has acquired and holds in accordance with these regulations shares or voting rights in a target company entitling them to exercise twenty-five per cent or more of the voting rights in the target company but less than the maximum permissible non-public shareholding, shall acquire within any financial year additional shares or voting rights in such target company entitling them to exercise more than five per cent of the voting rights, unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations. The typical steps and corresponding timelines in an open offer process: Under most scenarios (except in certain types of indirect acquisitions) on the day of the triggering event, the acquirer is required to make a Public Announcement to the stock exchanges where shares of Target Company are listed and to SEBI. Such public announcement, - in the case of market purchases, shall be made prior to placement of the purchase order with the stock broker to acquire the shares, that would take the entitlement to voting rights beyond the stipulated thresholds. A copy of the public announcement shall be sent to the Board and to the target company at its registered office within one working day of the date of the public announcement Within 5 working days thereafter, the acquirer is required to publish a Detailed Public Statement (DPS) in newspapers and also submit a copy to SEBI, after creation of an escrow account. Not later than two working days prior to the date of the detailed public statement of the open offer for acquiring shares, the acquirer shall create an escrow account towards security for performance of his obligations under these regulations, and deposit in escrow account such aggregate amount according to the scale mentioned in the Regulations. Simultaneously with publication of such detailed public statement in the newspapers, a copy of the same shall be sent to stock exchanges where shares of the target company are listed ("BSE" in this case). Within 5 working days of publication of DPS, the acquirer through the manager to the offer is required to file a draft letter of offer with SEBI for its observations. Simultaneously with the filing of the draft letter of offer with the Board, the acquirer shall send a copy of the draft letter of offer to the target company at its registered office address and to all stock exchanges where the shares of the target company are listed. The letter of offer is dispatched to the shareholders of the target company, as on the identified date, after duly incorporating the changes indicated by SEBI, if there are any, not later than seven working days from the receipt of comments from the Board. The offer shall open not later than 12 working days from the date of receipt of SEBI's observations. The acquirer is required to issue an advertisement announcing the final schedule of the open offer, one working day before opening of the offer. The offer shall remain open for 10 working days from the date of opening of the offer. Within 10 working days after the closure of the offer, the acquirer shall make payments to the shareholders whose shares have been accepted. A post offer advertisement, giving details of the acquisitions, is required to be published by the acquirer within 5 workings days of the completion of payments under the open offer.