Sameer, an acquirer along with persons acting in concert (PACs) is holding 23% shares in Purpleberry Ltd. (a BSE listed company). Now, he intends to acquire 3% additional equity shares in Purpleberry Ltd. through seconda
CS Professional · Corporate Restructuring, Valuation and Insolvency · PYQS · December 2015
Sameer, an acquirer along with persons acting in concert (PACs) is holding 23% shares in Purpleberry Ltd. (a BSE listed company). Now, he intends to acquire 3% additional equity shares in Purpleberry Ltd. through secondary market in the current financial year. He is acquiring less than 5% shares in the financial year and is of the view that he need not to make open offer to public. Give your opinion regarding the need to make an open offer to the public.
Answer & Explanation:
One of the trigger for open offer is when an acquirer, who (along with PACs, if any) holds less than 25% shares or voting rights in a target company and agrees to acquire shares or acquires shares which along with his/PAC's existing shareholding would entitle him to exercise 25% or more shares or voting rights in a target company, will need to make an open offer before acquiring such additional shares. In the given case Mr. Sameer is already holding 23% shares and intends to acquire 3% additional equity shares that would entitle him 26% and thus have to comply with open offer requirements.
Topics: Corporate Restructuring
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