Upon public announcement by an Acquirer, the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 places certain obligations on the Target Company. Comment.

As per the SEBI (SAST) Regulations, 2011, where an Acquirer (with PAC), crosses the threshold limits prescribed in the Takeover Regulations, it shall make Public Announcement for the purpose of Open Offer to the shareholders of the Target Company. Obligations of the target company - When a public announcement of an open offer for acquiring shares of a target company is made, the Board of Directors of the target company shall ensure that during the offer period, the business of the target company is conducted in the ordinary course consistent with past practice: During offer period, (unless shareholders' special resolution by postal ballot) the Board of target company or its subsidiaries shall not: alienate any material assets whether by way of sale, lease, or otherwise or enter into any agreement therefore outside the ordinary course of business; effect any material borrowings outside the ordinary course of business; issue or allot any authorized but unissued securities entitling the holder to voting rights. implement any buy-back or effect any other change to capital structure of target company. enter into, amend or terminate any material contracts to which the target company or any of its subsidiaries is a party, outside the ordinary course of business, whether such contract is with a related party, within the meaning of the term under applicable accounting principles, or with any other person; and accelerate any contingent vesting of a right of any person to whom the target company or any of its subsidiaries may have an obligation, whether such obligation is to acquire shares of the target company by way of employee stock options or otherwise In any general meeting of a subsidiary of the target company in respect of the matters referred to in the above point (2), the target company and its subsidiaries, if any, shall vote in a manner consistent with the special resolution passed by the shareholders of the target company. Target Company is prohibited from fixing any record date for any corporate action on or after third working day prior to commencement of tendering period and until the expiry of the tendering period. Target company shall furnish to the acquirer (within 2 working days from identified date), a list of shareholders as per the register of members of the target company containing names, addresses shareholding and folio number, but the acquirer shall reimburse reasonable costs payable by the target company to external agencies in order to furnish such information. The Board of Directors of Target Company shall facilitate the acquirer in verification of shares tendered in acceptance of the open offer. On receiving detailed public statement, the Board of Target Company shall constitute a Committee of Independent Directors to provide recommendations (with reasons) on the open offer. The Committee may seek external professional advice. The Committee shall provide written recommendations on the open offer to the shareholders of the Target Company Also, the recommendations shall be published in newspapers, and sent to stock exchange (s), Board and the Manager. The Board of Directors of the target company shall make available to acquirers making competing offers, any information and co-operation provided to an acquirer who has made a competing offer. Upon fulfilment by the acquirer, of the conditions required under applicable regulations, the board of directors of the target company shall without any delay register the transfer of shares acquired by the acquirer in physical form, whether under the agreement or from open market purchases, or pursuant to the open offer.