Super Product Agro Ltd. is proposed to be merged in Geetanjali Ayurved India Ltd. What are the check points to be observed in due diligence with respect to payment of consideration for merger and amalgamation.

Under the Regulation 21 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, following check points should be observed: For the amount of consideration payable in cash, the acquirer shall open a special escrow account with a banker to an issue registered with the Board and deposit therein, such sum as would, together with cash transferred under clause (b) of sub-regulation (10) of regulation 17, make up the entire sum due and payable to the shareholders as consideration payable under the open offer, and empower the manager to the offer to operate the special escrow account on behalf of the acquirer for the purposes under these regulations. Subject to provisos to sub-regulation (11) of regulation 18, the acquirer shall complete payment of consideration whether in the form of cash, or as the case may be, by issue, exchange or transfer of securities, to all shareholders who have tendered shares in acceptance of the open offer, within ten working days of the expiry of the tendering period. Unclaimed balances, if any, lying to the credit of the special escrow account referred to in sub-regulation (1) at the end of seven years from the date of deposit thereof, shall be transferred to the Investor Protection and Education Fund established under the Securities and Exchange Board of India (Investor Protection and Education Fund) Regulations, 2009. As per Section 236 read with Rule 27 of the Companies (Arrangement and Amalgamations) Rules, 2016, In case of purchase of equity shares of the minority shareholders of the company, the following point shall also be considered by registered valuer: (1) In case of a listed company; The offer price shall be determined in the manner as may be specified by the Securities And Exchange Board Of India under the relevant regulations framed by it, as may be applicable; and The registered valuer shall also provide a valuation report on the basis of valuation addressed to the board of directors of the company giving justification for such valuation. (2) In the case of an unlisted company and a private company, the offer price shall be determined after taking into account the following factors:- the highest price paid by the acquirer, person or group of persons for acquisition during last twelve months; the fair price of shares of the company to be determined by the registered valuer after taking into account valuation parameters including return on net worth, book value of shares, earning per share, price earning multiple vis-à-vis the industry average, and such other parameters as are customary for valuation of shares of such companies; and the registered valuer shall also provide a valuation report on the basis of valuation addressed to the board of directors of the company giving justification for such valuation.