MUMBAI, January 15: The takeover panel of the Securities and Exchange Board of India (SEBI) has rejected the application sought by Inox Leasing and Finance (ILF) to make an open offer to acquire shares of Gujrat Fluorochemicals (GF). ILF had made an application to SEBI seeking exemption from the application of Chapter III of the SEBI (Substantial and Acquisition of Shares and Takeovers) Regulations from making a public offer for its proposed acquisition of shares of the target company.
The panel considered the facts of the case and recommended that the exemption sought may be refused on the grounds that since the management control of the target company is presently not with the acquirers, the totality of the circumstances do not merit an exemption to be granted.
After taking into consideration the recommendation of the panel and the submissions made by the acquirers, SEBI concluded that the proposed acquisition amounts to consolidation of holdings by the acquirer in the target company which is far in
excess of the 2 per cent stipulation under the takeover regulation.
As per the application filed by the company, the acquirer proposed to increase its holding in the target company to 51 per cent over a period of one year from the open market. The exemption was sought on the grounds that the share price of the target company in the secondary market is at present abnormally low and this may attract a corporate predator.
In order to ensure that the target company does not fall prey to a domestic or foreign corporate predator the acquirer is desirous of increasing its holding in the target company to 51 per cent of the target company's equity.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
