Making a Public Offer to Acquire a Listed Company (Takeover)

Steps

1. Work out if you're an "acquirer" — remember that shares held by people "acting in concert" with you (your group companies, promoters, directors, relatives, or your securities manager/bankers/brokers) are added to your own holding for every threshold below.
2. Check the 10% disclosure trigger: if your aggregate holding (with concert parties) passes 10% of a listed company's voting shares, disclose it to the company, the securities exchange, and the Commission within 2 working days of the allotment or acquisition. You can then add up to a further 30% within the next 12 months without a fresh disclosure.
3. Check whether you need a mandatory public offer: you cannot acquire more than 30%, cannot add further shares once holding between 30% and 51%, and cannot acquire control of a listed company, without first making a public offer to all shareholders — unless the acquisition falls within an exempt category (a proportionate rights issue, an underwriter's allotment, a bank enforcing security, succession/inheritance, a court-approved scheme of arrangement/merger/de-merger, a loan-conversion option, a privatization sale, a defined inter se transfer among relatives/promoters/group companies/long-standing major shareholders, or an approved rehabilitation scheme) — even exempt acquisitions must still be disclosed afterward.
4. Appoint a manager to the offer — under the Regulations, a "Consultant to the Issue" duly licensed by the Commission — who must be independent of both you and the target company.
5. Make the public announcement of intention, then — within 180 days (extendable by 90) — the public announcement of the public offer itself, followed by offer letters to every shareholder on the target's register as of the date of book closure; neither document may contain misleading material. The whole process runs on a fixed timetable pegged to "T" (the date of the public offer announcement) — book closure notice at T+22, book closure T+36 to T+42, offer letters at T+45, acceptance period T+48 to T+54, and final settlement by T+64. The public offer must be for at least 50% of the target's remaining voting shares (and if made conditional, the minimum acceptance level cannot exceed 35% of those remaining shares). The price must be the highest of several benchmarks set by Regulation 13 — different ones apply depending on whether the target's shares are "frequently traded" (traded on at least 80% of days over the prior 180 days, with adequate volume) or not. You must lodge security — cash escrow, government debt securities, a bank guarantee, or eligible shares with a haircut — with the manager to the offer on or before the announcement date.
6. Watch for a competitive bid — anyone else can top your offer within 21 days of your public announcement, at a higher price and for at least as many shares. You can make an upward revision to your own offer (price or quantity) up to 7 working days before closure. Once made, a public offer generally cannot be withdrawn except in narrow circumstances (a competing bid, the death or unsound mind of a sole individual acquirer, or a Commission-prescribed circumstance).
7. Remember the target board's hands are tied during the offer period — it cannot dispose of the undertaking, encumber assets, issue further shares, enter material contracts, or appoint acquirer-aligned directors, until the acquisition completes. After completion, the target must let the board's composition change to give you proportionate representation, or you can force fresh elections within 30 days by notice to the company and the Commission.
8. Know what's at stake if it goes wrong: the Commission can debar you and anyone acting in concert with you from acquiring shares in a listed company for 3 years, disqualify complicit directors/CEO/CFO/company secretary from holding office in a listed company for 2 years, and impose penalties up to Rs. 100 million for non-compliance.