SEBI amends delisting rules to facilitate mergers and acquisitions

The Securities and Exchange Board of India (SEBI) has amended rules relating to delisting (deleting) equity shares of a company after an open offer as part of an effort to facilitate merger and acquisition deals for listed companies. .

According to a notification issued by Sebi, under the new framework, the promoters or acquirer companies will have to disclose their intention to delist the shares of the company from the exchanges through an initial public announcement.

If the acquiring company wants to delist the target firm, it will have to declare the removal of shares at a price higher than the price of the open offer. “If the open offer is for acquisition indirectly, the acquirer will have to disclose the price and notional price of the open offer during the detailed public statement and in the offer letter,” Sebi said. If an open offer is initiated, compliance with the takeover rules could result in the acquiring company’s holdings exceeding 75 per cent or at times more than 90 per cent.