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STANDARD LETTER OF OFFER

FOR AN OPEN OFFER

IN TERMS OF THE

SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVERS) REGULATIONS, 1997 AND SUBSEQUENT AMENDMENTS THEREOF

 

Updated as on January 1, 2003

 General Instructions:

 

1.      The purpose of this standard letter of offer for an open offer made in accordance with Chapter III of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereof is to provide the requisite information about the acquirer(s) / offer so as to enable the shareholders to make an informed decision of either continuing with the target company or to exit from the target company.  Care shall be taken by the Merchant Banker (MB) to ensure that the Letter of Offer may not be technical in legal or financial jargons, but it shall be presented in simple, clear, concise and easily understandable language.

 

2.      This standard Letter Of Offer enumerates the minimum disclosure requirements to be contained in the Letter Of Offer of an open offer. The MB/ acquirer is free to add any other disclosure(s) which in his opinion is material for the shareholders, provided such disclosure(s) is not presented in an incomplete, inaccurate or misleading manner and is made in accordance with the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereof.

 

3.      The standard Letter Of Offer prescribes only the nature of the disclosures that should be contained under various heads in the Letter Of Offer and is not intended to describe the language to be contained therein.

 

4.      All the financial data shall be in terms of Rupees Lacs unless required otherwise (e.g. EPS).  When financial data pertains to an overseas entity, the rupee equivalent shall  be disclosed in terms of Rs. Lacs and the basis of conversion shall also be disclosed. (If so desired, such data may also be disclosed in terms of the monetary unit applicable for that overseas entity).

 

5.      Unless otherwise specified

5.1.   Reference to shares (as defined in Regulations 2(1)(k)) shall mean reference to fully paid up shares.

 

5.2.   Information contained in Letter Of Offer shall be as on the date of the Public Announcement (PA).

 

5.3.   The “Regulations” shall mean SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereof.

 

5.4.   The Merchant Banker to the Offer (MB) would mean the Merchant Banker appointed by the acquirer in terms of regulation 13.

 

5.5.   The Registrar to the Offer, if appointed, would mean an entity registered with SEBI under SEBI (Registrar to Issue and Share Transfer Agents) Rules and Regulations, 1993.

 

6.      All the requisite disclosures/statements in respect of  the acquirer(s), persons who are acting  in concert  with the acquirer for the purpose of the offer (PACs) and persons who are deemed to be acting in concert  with the acquirers  for the purpose of  the offer (PACs)shall be made in the Letter Of Offer.

 

7.      The Form of acceptance cum acknowledgement should be with a perforation.

 

8.      The source from which data / information is obtained should be mentioned in the relevant pages of Letter Of Offer.

 

9.      MB shall ensure the following;

9.1.   The Specified Date shall not be later than 30th day from the PA date (Inclusive of PA date)

9.2.   The Offer closing Date shall be the 30th day from the Offer Opening Date (inclusive of offer opening date).

9.3.   The Date by which the acceptance / rejection of the offer would be intimated and the corresponding payment for the acquired shares and / or the share certificate(s) for the rejected shares will be dispatched, shall be within a period of 30 days from the offer closing date.

10) MB shall submit the Due Diligence Certificate in terms of Regulations to SEBI along with the draft Letter Of Offer as per the standardised format.

 

Format of the Standard Letter Of Offer:

 

The sequence of presentation in Letter Of Offer shall be as under:

 

1.      Cover page

2.      Disclaimer clause

3.      Details of the offer

4.      Background of the Acquirer(s) (including PACs, if any).

5.      Option in terms of 21(3)

6.      Background of the Target Company

7.      Offer price and financial arrangements

8.      Terms & Conditions of the offer

9.      Procedure for acceptance and settlement of the offer.

10.  Documents for inspection

11.  Declaration by the Acquirer(s) (including PACs, if any).

 

1) COVER PAGE

 

Cover pages shall be white with no patterns or pictures printed on it except emblems/ logo, if any, of the acquirer company / MB / Registrar, if any.

 

A)  Front outer cover page shall contain the following details  :

i) On Top

“This Document is important and requires your immediate attention."

This Letter of offer is sent to you as a shareholder(s) of (name of the target company). If you require any clarifications about the action to be taken, you may consult your stock broker or investment consultant or MB / Registrar to the offer (the latter only if appointed).  In case you have recently sold your shares in the Company, please hand over this Letter Of Offer and the accompanying Form of Acceptance cum acknowledgement and  Transfer Deed to the Member of Stock Exchange through whom the said sale was effected.”

ii)   In middle in a box

  1. Name and address of the Acquirer(s) (including names of PACs, if any with him.) along with their telephone and fax numbers.
  2. Name and address of the registered office of the Target Company along with its telephone and fax numbers.
  3. Number and percentage of equity shares of Target Company proposed to be acquired by acquirer(s) through the open offer. Ensure that the percentage is calculated and disclosed w.r.t. total voting capital of the target company as at the expiration of 30 days after the closure of the offer in terms of Reg. 21(5).
  4. Offer price per share in terms of rupees. Indicate separately the offer price for fully paid up equity shares as well as partly paid up equity shares, if any, of the Target Company. Disclose the mode of payment (i.e. cash, exchange of securities etc. in terms of regulation 20(2). Where the offer price is by way of exchange of securities etc., the disclosures should be made accordingly.
  5. A statement that the offer is pursuant to SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereof.  
  6. If the offer is conditional, specify conditions viz minimum level of acceptance, differential pricing, if any.
  7. If the offer is a competitive bid, mention that the competitive offer is made pursuant to an open offer made by the original bidder (name) and that the competitive bid has been  made   as per sub-regulation (1) and (3) of Regulation 25.
  8. Mention the statutory approval(s), if any, required to implement the offer and its current status.
  9. Disclose the following “Shareholders who have accepted the offer by tendering the requisite documents, in terms of the Public announcement / Letter of offer, can withdraw the same upto three working days prior to the date of the closure of the offer”

 

  1. A statement that upward revision/withdrawal, if any, of the offer would be informed by way of P.A. in the same newspapers where the original P.A. has appeared.  Indicate the last date for such revision (regulation 26). Also mention that the same price would be payable by the acquirer(s) for all the shares tendered anytime during the offer.
  2. Disclose the following in bold “ If there is competitive bid :

1.      The public offers under all the subsisting bids shall close on the same date.

2.      As the offer price can not be revised during 7 working days prior to the closing date of the offers / bids, it would, therefore, be in the interest of shareholders to wait till the commencement of that period to know the final offer price of each bid and tender their acceptance  accordingly”

  1. A statement that a copy of public announcement and Letter Of Offer (including form of acceptance cum acknowledgment)  is also available on SEBI’s web-site (www.sebi.gov.in)

iii)  At the bottom 

  1. The name of MB and address of the dealing office of MB along with its telephone, fax number and email address, contact person.
  2. The name and address of the Registrar to the offer, if any along with its telephone, fax number and email address, contact person.
  3. While complying with Regulation 22 (4) and 22(5) ensure that the date of opening and closing of the offer do not fall on a Sunday or a holiday. Disclose the schedule of the activities as per the following table. Further  also disclose the day along with the dates in the activity schedule i.e. January 1, 2002(Tuesday).

Activity

Day and date

Public Announcement (PA) Date

 

Specified Date

 

 

Last date for a competitive bid

 

 

Date by which Letter of Offer will be despatched to the shareholders

 

Offer opening Date

 

Last date for revising the offer price/ number of shares

 

 

Last date for withdrawal by shareholders

 

 

Offer closing Date

 

Date by which the acceptance / rejection would be intimated and the corresponding payment for the acquired shares and /or the share certificate for the rejected shares will be despatched. 

 

 

B)   Front inside cover page shall contain the following

 

1.      On top

 

An index as follows:

 

Sr. No. 

Subject          

Page No.

1

Disclaimer clauses

 

 

2

Details of         the offer

 

 

3

Background of the Acquirer(s) (including PACs , if any).

 

 

4

Disclosure in terms of Reg. 21(3)

 

 

5

Background of the Target Company

 

 

6

Offer Price and Financial arrangements

 

 

7

Terms & Conditions of the offer

 

 

8

Procedure for acceptance and settlement of the offer.

 

 

9

Documents for inspection

 

 

10

Declaration by the Acquirer(s) (including PACs, if any)

 

 

                             

 

ii)    At the Bottom

Definitions of the specialized terms used in the Letter Of Offer for easy understanding by the shareholders viz Target company, Acquirers, PACs, Regulations, etc. No other terms should be used in the Letter Of Offer for entities defined as such in the Regulations. (eg. the word offeror(s) should be not used to refer the term acquirer(s)).

 

2.  DISCLAIMER CLAUSE

The following on the first page of Letter Of Offer:

“IT IS TO BE DISTINCTLY UNDERSTOOD THAT FILING OF DRAFT LETTER OF OFFER WITH SEBI SHOULD NOT IN ANY WAY BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED, VETTED OR APPROVED BY SEBI.  THE DRAFT LETTER OF OFFER HAS BEEN SUBMITTED TO SEBI FOR A LIMITED PURPOSE OF OVERSEEEING WHETHER THE DISCLOSURES CONTAINED THEREIN ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH THE REGULATIONS. THIS REQUIREMENT IS TO FACILITATE THE SHAREHOLDERS OF (NAME OF THE TARGET CO.) TO TAKE AN INFORMED DECISION WITH REGARD TO THE OFFER. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR FINANCIAL SOUNDNESS OF THE ACQUIRER(S), PACs OR THE COMPANY WHOSE SHARES/CONTROL IS PROPOSED TO BE ACQUIRED OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE LETTER OF OFFER.  IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE ACQUIRER(S) IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THIS LETTER OF OFFER, THE MERCHANT BANKER IS EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT ACQUIRER(S) DULY DISCHARGES ITS RESPONSIBILITY ADEQUATELY.  IN THIS BEHALF, AND TOWARDS THIS PURPOSE, THE MERCHANT BANKER (INDICATE NAME) HAS SUBMITTED A DUE DILIGENCE CERTIFICATE DATED ......................... TO SEBI IN ACCORDANCE WITH THE SEBI (SUBSTANTIAL ACQUISITION OF SHARES AND TAKEOVER) REGULATIONS 1997 AND SUBSEQUENT AMENDEMENT(S) THEREOF . THE FILING OF THE LETTER OF OFFER DOES NOT , HOWEVER, ABSOLVE THE ACQUIRER(S) FROM THE REQUIREMENT OF OBTAINING SUCH A STATUTORY CLEARANCES AS MAYBE REQUIRED FOR THE PURPOSE OF THE OFFER..”

 

3.      DETAILS OF THE OFFER

3.1.   Background of the offer

3.1.1.      Mention the Regulation (10,11(1), 11(2), 12, 25(1) & 33) in accordance with which the offer is made i.e. mention whether the offer is made for substantial acquisition of shares or Consolidation of holdings and/or Change in Control or competitive Bid  or is towards Bail out Takeover.

3.1.2.      Details of the proposed acquisition (substantial acquisition of shares/voting rights or change in control or both) which triggered the open offer such as name(s) of acquirer(s) and of PACs, their existing share holding in the Target company, whether it was a negotiated deal or open market purchase(s) or whether offer is as a result of global acquisition resulting in indirect acquisition of the target company, acquisition price per share (highest and average), number and percentage of shares acquired,  etc.

3.1.3.      In case there is any agreement, mention  important features of the agreement(s)  including those pertaining to Regulation 22(16), acquisition price per share (highest and average as well as separately for fully paid and partly paid up), number and percentage of shares to be acquired under the agreement,  name of the seller(s), complete addresses of sellers (including phone number/ fax number etc),  names of parties to the agreement,  date of agreement, manner of payment of consideration, proposed change in control, if any,

3.1.4.      Whether the proposed change in control is through an arrangement.  Give salient features of the arrangement.

3.1.5.      Whether any of acquirer(s), sellers or the Target Company has been prohibited by SEBI from dealing in securities, in terms of direction issued u/s 11B of SEBI Act or under any of the regulations made under the SEBI Act.

3.1.6.      Proposed change, if any, in Board of Directors after the offer, mentioning names of the Directors representing acquirers.

3.2.   Details of the proposed offer

3.2.1.      Mention names, dates and editions of the newspapers where the public announcement made in accordance with Regulation 15 appeared. Disclose the public announcement is also available on the Sebi website at www.sebi.gov.in.

3.2.2.      Indicate the number and percentage of shares proposed to be acquired by the acquirers from the existing shareholders and the mode of payment of consideration, if it is in cash, then the offer price per share shall be mentioned, if by way of exchange of shares/ secured instruments, then, inter-alia, the exchange ratio to be disclosed in terms of Regulation 20(9).

3.2.3.      In case, there are fully paid up and partly paid up shares, offer price for both shall be mentioned separately. 

3.2.4.      Differential price if any, in accordance with explanation (iii) to regulation 20 (11).

3.2.5.In case of competitive bids, the competitive bidder shall also disclose the following details:

3.2.5.a.            The fact that his offer is competitive offer made pursuant to the open offer made by the original bidder. The competitive bid is as per sub Regulation (1) & (3) of regulation 25.

3.2.5.b.            Details of the original offer such as name of the original acquirer(s), name of the Merchant Banker, number and % of shares bid for, offer price, mode of payment, opening date.

3.2.5.c.            Any other relevant information

 

3.2.6.In case of the conditional offer, specify the following :

3.2.6.a.            Minimum level of acceptance (no. and %  of shares)

3.2.6.b.            Differential price, if any, in accordance with Explanation (iv) to Regulation 20 (11).

 

3.2.7.      Disclose details of further acquisition(s), if any,  by acquirer(s)/ PACs  after the date of P.A  and upto the date of  Letter Of Offer  viz., no. and % of shares acquired, mode and acquisition price etc.

3.3.   Object of the acquisition/ offer

3.3.1.      Disclose reasons of acquiring shares or control over the Target Company.

 

4.      BACKGROUND OF THE ACQUIRER (INCLUDING PACs, IF ANY)

(In case, the open offer is for the change in control of the Target Company or is an offer where the offer price is payable in terms of exchange of securities, details under this heading shall  be given as per Annexure I. In all other cases, the following details shall be furnished)

4.1.   If acquirer(s) (including PACs) is a company

4.1.1.      Name and address of the company(ies).

4.1.2.      The relationship, if any, existing between them

4.1.3.      Salient features of the agreement, if any, entered between them with regard to the offer/ acquisition of shares.

4.1.4.      Brief History & Major areas of operations.

4.1.5.      Identity of the promoters and /or persons having control over such companies and the group, if any, to which such companies belong to.

4.1.6.      Confirm and disclose as to whether the applicable  provisions of chapter II of SEBI Takeover Regulations has been complied with by acquirer/ PACs within the time specified in the Regulations. Delay or non-compliance with these provisions if any, may be disclosed in the letter of offer. Further the extent of compliance by the acquirers/ PACs with the applicable  provisions of chapter II should be furnished under a separate annexure to SEBI along with the draft letter of offer as per the format at Annexure III of the standard letter of offer.

4.1.7.      Names and residential addresses of Board of directors of acquirer(s). Confirm whether any of such director(s) is already on the Board of Directors of Target Company. If so, disclosures in terms of Regulation 22(9).

4.1.8.       Brief audited financial details  for a period of last three years. The subsequent certified financial data should also be disclosed so that the financials are not older than six months from the P.A. date.

(Amount Rs. In lacs)

 

 

Profit & Loss Statement

Year I

Year II

Year III

Income from operations

 

 

 

Other Income

 

 

 

Total Income

 

 

 

Total Expenditure.

 

 

 

Profit Before Depreciation Interest and Tax

 

 

 

Depreciation

 

 

 

Interest

 

 

 

Profit Before Tax

 

 

 

Provision for Tax

 

 

 

Profit After Tax

 

 

 

 

Balance Sheet Statement

Year I

Year II

Year III

Sources of funds

 

 

 

Paid up share capital

 

 

 

 

Reserves and Surplus (excluding revaluation reserves)

 

 

 

Networth

 

 

 

Secured loans

 

 

 

Unsecured loans

 

 

 

Total

 

 

 

Uses of funds

 

 

 

Net fixed assets

 

 

 

Investments

 

 

 

Net current assets

 

 

 

Total miscellaneous expenditure not written off

 

 

 

Total

 

 

 

 

Other Financial Data

Year I

Year II

Year III

Dividend (%)

 

 

 

Earning Per Share

 

 

 

Return on Networth

 

 

 

Book Value Per Share

 

 

 

 

4.2     If Acquirer(s) (including PACs, if any) is an individual

4.2.1.      Name (s) and address(es) of each individual

4.2.2.      The relationship, if any, existing between them

4.2.3.      Salient features of the agreement, if any, entered between them with regard to the offer/ acquisition of shares.

4.2.4.      Principal areas of business and relevant experience

4.2.5.      Networth duly certified by a Chartered Accountant

4.2.6.      Confirm and disclose as to whether the applicable  provisions of chapter II of SEBI Takeover Regulations has been complied with by acquirer/ PACs within the time specified in the Regulations. Delay or non-compliance with these provisions if any, may be disclosed in the letter of offer. Further the extent of compliance by the acquirers/ PACs with the applicable  provisions of chapter II should be furnished under a separate annexure to SEBI along with the draft letter of offer as per the format at Annexure III of the standard letter of offer.

4.2.7.      Positions held on the Board of directors of any listed company (ies)

4.2.8.      Name (s) of the company where individual is a full time director.

4.3      Disclosure in terms of  Regulation 16(ix)

 

5.   Option in terms of Regulation 21(3), if applicable

5.1     If the public offer results in public shareholding being reduced to 10% or less of the voting capital of the company or if the public offer is in respect of a company which has public shareholding of less than 10% of the voting capital, disclose the option which the acquirer would exercise in terms of Regulation 21(3). In case, acquirer intends to exercise the delisting option provided in the Regulations, give all relevant disclosure as required under the guidelines specified by the Board in respect of delisting of securities.

6.   BACKGROUND OF THE TARGET COMPANY

6.1     Brief history & main areas of operations.

6.2     Share capital structure of the target company

Paid up Equity Shares of Target company

No.of Shares/ voting rights

% of shares/voting rights

Fully paid up equity shares

 

 

Partly paid up equity shares

 

 

Total paid up equity shares

 

 

Total voting rights in Target company

 

 

6.3     Indicate whether there are any outstanding convertible instruments (warrants / FCDs / PCDs) etc. and whether the same have been taken into account for calculating voting rights of target company and reasons therefor. In case there are partly paid up shares, disclose about status of their voting rights.

6.4     Confirm and disclose as to whether the applicable  provisions of chapter II of SEBI Takeover Regulations has been complied with by target company as well as sellers, promoters and other major shareholders within the time specified in the Regulations. Delay or non-compliance with these provisions if any, may be disclosed. The extent of compliance by target company as well as sellers, promoters and other major shareholders with the applicable  provisions of chapter II should be furnished under a separate annexure to SEBI along with the draft letter of offer as per the format at Annexure III & IV of the standard letter of offer. In case of delay or non compliance disclose the complete address along with phone/fax nos and individual holding a separate annexure while filing the draft letter of offer.

6.5     Indicate compliance status with the listing requirements and the penal actions, if any, taken by the Stock Exchanges.  In the absence of any punitive action, make a specific statement to such effect

6.6     Present composition of the Board of Directors (BOD) as on the date of public announcement.  Indicate the names of director(s), if any, representing the acquirer on the BOD of the Target Company and their dates of appointment.

6.7     Relevant details of any merger/demerger, spin off during last 3 years involving the target company. Change of name since listing and dates thereof.

6.8     Brief audited financial details for a period of last three years. The subsequent certified financial data should also be disclosed so that the financials are not older than six months from the P.A. date.

(Amount Rs. In lacs)

 

Profit & Loss Statement

Year I

Year II

Year III

Income from operations

 

 

 

Other Income

 

 

 

Total Income

 

 

 

Total Expenditure.

 

 

 

Profit Before Depreciation Interest and Tax

 

 

 

Depreciation

 

 

 

Interest

 

 

 

Profit Before Tax

 

 

 

Provision for Tax

 

 

 

Profit After Tax

 

 

 

 

Balance Sheet Statement

Year I

Year II

Year III

Sources of funds

 

 

 

Paid up share capital

 

 

 

Reserves and Surplus (excluding revaluation reserves)

 

 

 

Networth

 

 

 

Secured loans

 

 

 

Unsecured loans

 

 

 

Total

 

 

 

Uses of funds

 

 

 

Net fixed assets

 

 

 

Investments

 

 

 

Net current assets

 

 

 

Total miscellaneous expenditure not written off

 

 

 

Total

 

 

 

 

Other Financial Data

Year I

Year II

Year III

Dividend (%)

 

 

 

Earning Per Share

 

 

 

Return on Networth

 

 

 

Book Value Per Share

 

 

 

 

6.9 Pre and Post- Offer share holding pattern of the target company as per the following table

As on the date of letter of offer

 

Shareholders’ category

Shareholding  & voting rights prior to the agreement/ acquisition and offer.

Shares /voting rights agreed to be acquired which triggered off the  Regulations.

Shares/voting rights to be acquired in open offer (Assuming full acceptances)

Share holding / voting rights after the acquisition and offer. i.e.

 

 

(A)

(B)

(C)

(A)+(B)+(C)=(D)

 

No.

%

No.

%

No.

%

No.

%

(1) Promoter   gp.

 

 

 

 

 

 

 

 

a)      Parties to agreement, if any

b)      Promoters other than (a) above

 

 

 

 

 

 

 

 

Total 1(a+b)

 

 

 

 

 

 

 

 

 

(2) Acquirers

a)      Main Acquirer**

b)      PACs **

 

 

@

 

 

 

 

 

 

 

Total 2(a+b)

 

 

 

 

 

 

 

 

 

(3) Parties to agreement other than(1) (a) & (2)

 

 

 

 

 

 

 

 

 

(4) Public  (other than parties to agreement, acquirers & PACs)

 

 

 

 

 

 

 

 

 

a)      FIs/MFs/FIIs/Banks, SFIs (indicate names)

b)      Others

 

(Indicate the total number of shareholders in “Public category)

 

 

 

 

 

 

 

 

Total (4)(a+b)

 

 

 

 

 

 

 

 

 

GRAND TOTAL (1+2+3+4)

 

 

 

 

 

 

 

 

** If more than one acquirer / PACs, details shall be given for each separately.

@ Also include shares of target company, purchased by acquirers and PACs, if any, after the Public announcement till the date of letter of offer.

 

7.      OFFER PRICE AND FINANCIAL ARRANGEMENTS

7.1     Justification of Offer price

7.1.1.      Names of all the Stock exchanges (SEs) where shares of the target company are listed and also where it is traded under permitted category.

7.1.2.      The annualized trading turnover  during the preceding 6 calendar months prior to the month in which the P.A. is made in terms of number & % of total listed shares, in each stock exchange stated at (i ) above, shall be given as under. (Accordingly, disclose as to on which of the Stock Exchanges the shares are not infrequently/infrequently traded in terms of explanation(i) to regulation 20(5).)

Name of stock exchange(s)

Total no. of shares traded during the 6 calendar months prior to the month in which PA was made.

Total No.of listed Shares

Annualized Trading turnover( in terms of % to total listed shares)

SE1

 

 

 

SE2

 

 

 

SE3

 

 

 

Note : Trading volume data should be taken from the respective SEs official quotations.

7.1.3.      In respect of SEs where shares are not infrequently traded in terms of Regulations, ensure and disclose that minimum offer price is highest of all the following prices:

7.1.3.a.      The negotiated price under the agreement referred to in clause (a) of sub-  regulation (4) of regulation 20;

7.1.3.b.      Highest price paid by the acquirer or persons acting in concert with him for acquisition, if any, including by way of allotment in a public or rights or preferential issue during the twenty six week period prior to the date of public announcement, referred to in clause (b) of sub-  regulation (4) of regulation 20;

7.1.3.c.      the average of the weekly high and low of the closing prices of the shares of the target company as quoted on the stock exchange where the shares of the company are most frequently traded during the twenty six weeks or the average of the daily high and low prices of the shares as quoted on the stock exchange where the shares of the company are most frequently traded during the two weeks preceding the date of public announcement, whichever is higher referred to in clause (c) of sub-  regulation (4) of regulation 20.

7.1.4.      Please note that for calculating average price as per Regulation 20(4)(c), the denominator should contain the number of weeks for which quotes are considered. The price and volume data should be disclosed in the following  format:

26 weeks weekly high/ low

Week no.

Week ending

High (Rs.)

Low (Rs.)

Average (Rs.)

Volume

 

 

 

 

 

 

 

 

 

                        2 weeks daily high/ low

Day No 

Dates

High (Rs.)

Low (Rs.)

Average (Rs.)

Volume

 

 

 

 

 

 

 

 

 

7.1.5.      If the shares are infrequently traded on a particular Stock exchange, give required disclosures in accordance with each clause of Regulation 20(5).  Ensure that calculations of parameters set out in 20(5)(c) are based on the latest audited data of the Target Company.  If subsequent financial data is available for a period of 6 months or more, calculation in terms of Regulation 20(5)(c) based on such data shall also be disclosed.

 

7.1.6.      In case of partly paid shares, the offer price shall be calculated as the difference between the offer price and the amount due towards calls-in-arrears or calls remaining unpaid together with interest, if any, payable on the amount called up but remaining unpaid.

 

7.1.7.      The offer price for indirect acquisition or control shall be determined with reference to the date of the public announcement for the parent company and the date of the public announcement for acquisition of shares of the target company, whichever is higher, in accordance with sub-regulation (4) or sub-regulation (5)} of Regulation 20.

 

7.1.8.      Non Compete fee

7.1.8.a.      In case of non-compete agreement for payment to any person other than the target company, disclose the names of the parties to the agreement, reasons for the agreement and the amount paid.

7.1.8.b.      In case the payment is more than 25% of the offer price arrived in terms of Reg. 20(4), 20(5) or 20(6), disclose how the same has been factored into the offer price.

7.1.8.c.      In the absence of any non-compete agreement, give a specific negative statement in this regard.

 

7.1.9.      In terms of Reg. 20(11) give a specific statement that the offer price is justified.

 

7.1.10.  Also ensure and disclose that the offer price shall not be less than the highest price paid by the acquirers (including PACs) for any acquisition of shares of target company from the date of PA upto 7 working days prior to the closure of the offer.

 

7.2     Financial arrangements :

 

7.2.1.      Disclose the total amount of funds required to make the payment of consideration for the shares tendered during the open offer (assuming full acceptances) and at the highest price, if the offer is subject to differential pricing.

 

7.2.2.      Disclosures about the amount deposited in escrow account in terms of Regulation 28(2).

 

7.2.3.      In case, the escrow account consists of cash deposit, disclose the name and address of the bank, where cash amount as required under Regulation 28(1) has been deposited. Also ensure and disclose that the MB has been empowered to operate the escrow account in accordance with the Regulations.

 

7.2.4.      In case the escrow account consists of a Bank guarantee, disclose the  name and address of the bank. Also disclose that bank guarantee is valid at least for a period commencing from the date of PA until 30 days after the closure of the offer. Also ensure that bank guarantee is sought from a bank who is not associate of or group of the acquirer or target company.  Disclose that the Bank Guarantee is in favour of Merchant Banker.

 

7.2.5.      In case, the escrow account consists of a deposit of securities in terms of Regulation 28(4)(c), give details like name, quantity, face value, paid up value, market price on the date of creation of escrow account, the margin etc. Disclose that Merchant Banker has been empowered by acquirer to realise the value of such escrow account by sale or otherwise.  Also disclose that if there is any deficit on realisation of value of the securities, the Merchant Banker shall make good any such deficit in accordance with Regulation  28(7).

 

7.2.6.      In case the escrow account consists of a Bank guarantee or deposit of approved securities, disclose the name and address of bank where cash deposit of at least 1% of the total consideration payable, is made in accordance with Regulation 28(10).

 

7.2.7.      Ensure and disclose that the acquirer has adequate and firm financial resources to fulfil the obligations under the open offer. Disclosures regarding sources of funds should be made in terms of Regulation 16 (xiv).

 

7.2.8.      Disclose the date of certificate,  name , complete address (including telephone, Fax  number) and membership number of the Chartered Accountant certifying the adequacy of financial resources of acquirer for fulfilling all the obligations under the offer.

 

7.2.9.      Ensure and disclose that MB has satisfied himself about the ability of the acquirer to implement the offer in accordance with the Regulations.

 

8.      TERMS AND CONDITIONS OF THE OFFER

8.1     All the operational terms and conditions subject to which acquirer(s) would accept the offer should be disclosed. The conditions mentioned in the letter of offer should not be in violation of the provisions contained in the Regulations.

 

8.2     Locked in shares: Regarding acceptance of locked-in shares, whether acquired pursuant to the agreement or the offer, the same can be transferred to the acquirer subject to the continuation of the residual lock -in period in the hands of the acquirer. MB shall ensure that there shall be no discrimination in the acceptance of locked-in and non locked-in shares

 

8.3     Eligibility for accepting the offer: Disclose that the  offer is made to all the  remaining shareholders (except the acquirers, the persons acting in concert with acquirers and parties to agreements, if applicable) whose names appeared in the register of  shareholders  on (mention the specified date) and also to those persons (except the acquirers, the persons acting in concert with acquirers and parties to agreements, if applicable) who own the shares any time prior to the closure of  the offer,  but are not the registered shareholder(s).

 

8.4     Statutory approvals: Mention the nature of statutory approvals required for the offer. Disclose the current status of such approval.  A statement that no approval other than those mentioned is required for the purpose of this offer shall be incorporated.

 

9.      PROCEDURE FOR ACCEPTANCE AND SETTLEMENT

9.1     Procedure for accepting the offer by eligible persons shall be mentioned   indicating

9.1.1.      Name and Address of the entities  (merchant banker/ registrar) to whom the shares should be sent including name of the contact person, telephone no., fax no. and email address etc.

Working days and timings

Mode of delivery

 

 

 

9.1.2.      Mention all the relevant documents viz. Form of Acceptance cum acknowledgement, Original share Certificate, valid transfer deed required to be tendered.

9.1.3.      Disclose that shares and other relevant documents should not be sent to the acquirer/PACs/ Target Company.

9.2     Procedure for acceptance of the offer by unregistered shareholders, owners of shares who have sent them for transfer or those who did not receive the Letter of Offer

9.2.1.     Procedure for said persons shall be specified. The option of applying on plain paper giving all relevant details and forwarding relevant documents along with it, shall necessarily be given to such shareholders. Alternatively, such shareholders, if they so desire, may apply on the form of acceptance cum acknowledgement obtained from the website (www.sebi.gov.in) .  It shall be noted that no indemnity is needed from the unregistered shareholders.

9.3     In terms of Regulation 21(6), disclose the relevant provisions pertaining to acceptance of shares when shares offered under the offer by the shareholders are more than the shares agreed to be acquired by the acquirer(s).

9.4     Disclosure in line with Sub-regulation (12) of Regulation (22) about extension of time for payment of consideration and payment of interest should be made.

9.5     Ensure and disclose that the unaccepted shares / documents shall be returned by Regd. Post to the shareholders.

9.6     Ensure and disclose that the share certificates would be held in trust by the Manager to the offer / registrar to the offer, as the case may be, till the acquirer completes the offer obligations in terms of Regulations.

9.7     In case, the shares of Target company are dematerialised, MB should ensure to specify all the requisite procedural requirements in the Letter Of Offer.

 

10.  DOCUMENTS FOR INSPECTION

10.1 For inspection of material documents by public disclose the addresses of the places and timings. Such documents shall include:

10.1.1.        Certificate of incorporation, Memorandum and Articles of Association of the Acquirer, in case Acquirer is a company;

10.1.2.        A C.A's certificate certifying the net worth of Acquirer(s) in case Acquirer is a individual:

10.1.3.        A C.A’s certificate certifying the adequacy of financial resources with acquirers to fulfil the open offer obligations.

10.1.4.        Audited annual reports of the Acquirer and Target company for the last three years.

10.1.5.        A letter from the Bank confirming the amount kept in the escrow account and a lien in favour of MB.

10.1.6.        A Copy of the agreement, if any , which triggered the open offer

10.1.7.        A published copy of Public announcement.

10.1.8.        A copy of the letter from SEBI in terms of proviso to Regulation 18(2).

10.1.9.        When Escrow Account consists of approved securities, details of securities such as name, quantity, face value, paid up value, market price on the date of creation of escrow. etc.

10.1.10.    A copy of the agreement into with Depository participant for opening a special depository account for the purpose of the offer.

10.1.11.    A copy of the non-compete agreement, if any.

10.1.12.    Any other relevant document(s).

 

11.   DECLARATION BY THE ACQUIRERS (INCLUDING PACs, IF ANY)

11.1          Statements in terms of Regulation 22(6) regarding the Acquirers responsibility for the information contained in the Letter Of Offer.

11.2          A statement to the effect that each of the acquirers (including  PACs, if any) would be severally and jointly responsible for ensuring compliance with the Regulations shall be incorporated in the Letter Of Offer.

11.3          Letter Of Offer shall be signed by the acquirer(s)/owner of Attorney holders on their behalf  giving date and place. MB to ensure and disclose that person(s) signing the Letter Of Offer is duly and legally authorised by Acquirers (including PACs, if any).

 

Encl.:


ANNEXURE I

(Applicable in case open offer is for the change in control of the Target Company or is an offer where the offer price is payable in terms of exchange of securities.)

 

4.1 If acquirer(s) (including PACs, if any) is a company

4.1.1.      Name and address of the company (ies).

4.1.2.      Relationship, if any, existing between them

4.1.3.      Salient features of the agreement, if any, entered between them with regard to the offer/acquisition of shares

4.1.4.      Brief History & Major areas of operations.

4.1.5.      Identity of the promoters and /or persons having control over such companies and the group, if any, to which such companies belong to.

4.1.6.      Confirm and disclose as to whether the applicable  provisions of chapter II of SEBI Takeover Regulations has been complied with by acquirer/ PACs within the time specified in the Regulations. Delay or non-compliance with these provisions if any, may be disclosed in the letter of offer. Further the extent of compliance by the acquirers/ PACs with the applicable  provisions of chapter II should be furnished under a separate annexure to SEBI along with the draft letter of offer as per the format at Annexure III of the standard letter of offer.

4.1.7.      Share holding pattern as under.

Sl. No

Shareholder’s Category

No. and Percentage of Shares held

1.

Promoters

 

2.

FII/ Mutual-Funds/ FIs/Banks

 

3.

Public

 

 

Total Paid Up Capital

 

4.1.8.      Names and residential addresses of Board of directors of acquirer(s). Confirm whether any of such director(s) is already on the Board of Directors of Target Company. If so, disclosures in terms of Regulation 22(9).

4.1.9.      Name of the stock exchanges where the shares of acquirer are listed/traded in the permitted category, if acquirer is a listed company.

4.1.10.  Total Paid up capital, Face Value of shares and Market Price of shares.

4.1.11.  Brief audited financial details indicated at 4.1.12 below shall also be disclosed after making the following adjustments in the audited financial statements wherever quantification is possible.

4.1.11.1.        Adjustments / rectification for all incorrect accounting policies or failures to make provisions or other adjustments which resulted in audit qualifications;

4.1.11.2.        Material amounts relating to adjustments for last three years shall be identified and adjusted in arriving at the profits of the years to which they relate

4.1.11.3.        Where there has been a change in accounting policy during the last three years, the profits or losses of those years shall be re-computed to reflect what the profits or losses of those years would have been if a uniform accounting policy was followed in each of these years.  However, if an incorrect accounting policy is being followed, the re-computation of the financial statements would be in accordance with correct accounting policies;

4.1.11.4.        Statement of profit or loss shall disclose both the profit or loss arrived at before considering extraordinary items and after considering the profit or loss from extraordinary items.

4.1.11.5.        The statement of assets and liabilities shall be prepared after deducting the balance outstanding on revaluation reserve account from both fixed assets and reserves and the net worth arrived at after such deductions

4.1.12.  Brief audited financial details shall be given for a period of last three years. The subsequent certified financial data should also be disclosed so that the financials are not older than six months from the P.A. date.

(Amount Rs. In lacs)

 

Profit & Loss Statement

Year I

Year II

Year III

 

 

Income from operations

 

 

 

 

 

Other Income

 

 

 

 

 

Total Income

 

 

 

 

 

Total Expenditure.

 

 

 

 

 

Profit Before Depreciation Interest and Tax

 

 

 

 

 

Depreciation

 

 

 

 

 

Interest

 

 

 

 

 

Profit Before Tax

 

 

 

 

 

Provision for Tax

 

 

 

 

 

Profit After Tax

 

 

 

 



Balance Sheet Statement

Year I

Year II

Year III

Sources of funds

 

 

 

Paid up share capital

 

 

 

Reserves and Surplus (excluding revaluation reserves)

 

 

 

Networth

 

 

 

Secured loans

 

 

 

Unsecured loans

 

 

 

Total

 

 

 

Uses of funds

 

 

 

Net fixed assets

 

 

 

Investments

 

 

 

Net current assets

 

 

 

Total miscellaneous expenditure not written off

 

 

 

Total

 

 

 

 

Other Financial Data

Year I

Year II

Year III

Dividend (%)

 

 

 

Earning Per Share

 

 

 

Return on Networth

 

 

 

Book Value Per Share

 

 

 

4.1.13.  The following information in respect of all the companies promoted by the acquirer (PACs, if any) for the last three years based on the audited statements

4.1.13.1.        Name of Company,

4.1.13.2.         Date of incorporation,

4.1.13.3.        Nature of Business,

4.1.13.4.        Equity capital, Reserves (excluding revaluation reserves),

4.1.13.5.        Total Income,

4.1.13.6.        Profit After Tax (PAT),

4.1.13.7.        Earnings Per Shares (EPS),

4.1.13.8.        Net Asset Value (NAV).

4.1.13.9.        Mention if any of the companies stated above is a sick industrial company.

4.2.   If Acquirer(s) (including PACs, if any)is an individual, the following details shall be given:

4.2.1.      Name and residential addresses of each individual(s)

4.2.2.      Relationship, if any existing between them

4.2.3.      Salient features of the agreement, if any entered between them with regard to the offer/acquisition of shares.

4.2.4.      Principal areas of business  and relevant experience

4.2.5.      Net worth duly certified by a Chartered Accountant

4.2.6.      Confirm and disclose as to whether the applicable  provisions of chapter II of SEBI Takeover Regulations has been complied with by acquirer/ PACs within the time specified in the Regulations. Delay or non-compliance with these provisions if any, may be disclosed in the letter of offer. Further the extent of compliance by the acquirers/ PACs with the applicable  provisions of chapter II should be furnished under a separate annexure to SEBI along with the draft letter of offer as per the format at Annexure III of the standard letter of offer.

4.2.7.      Positions held on the Board of Directors of any listed company(ies)

4.2.8.      Name of the company (ies) where individual is a full time director, Brief financial of those listed company(ies) where the individual along with persons acting in concert with him, has a controlling stake

4.2.9.      The information stated at 4.1.13 above, in respect of all companies promoted by acquirer(s) (PACs, if any).

4.3.   Disclosure in terms of  Regulation 16(ix)

 

5.      Option in terms of Regulation 21(3), if applicable

5.1.   If the public offer results in public shareholding being reduced to 10% or less of the voting capital of the company or if the public offer is in respect of a company which has public shareholding of less than 10% of the voting capital, disclose the option which the acquirer would exercise in terms of Regulation 21(3). In case, acquirer intends to exercise the delisting option provided in the Regulations, give all relevant disclosure as required under the guidelines specified by the Board in respect of delisting of securities.

6.      Additional Disclosures in case where consideration is to be paid by the acquirer(s) in terms of exchange of instruments in terms of Regulation 20(2).

6.1.   Nature of instruments of Acquirer company which are offered such as NCDs, FCDs, PCDs, Shares etc.

6.2.   In case, the instruments are convertible into equity shares or have rights to subscribe for equity shares, give details such as exercise period, price & date of conversion, Pre and Post equity capital assuming full conversion etc.

6.3.   In case consideration is paid by way of secured instruments, all the features of such instruments such as face value, interest rate, redemption period, redemption amount, details of security created, name of the debenture trustee, etc.

6.4.   If the issue / allotment of instruments requires any approval from shareholders, whether the same has already been obtained / to be obtained, if yes disclose all the relevant details of the approval which shall include the amount of instruments issued / proposed to be issued, price of instruments, date when resolution passed / proposed to be passed, validity of the resolution etc.  If the approval is yet to be obtained status its off. In case, the resolution in this regard is not approved by the shareholders, disclose as to how the acquirer proposes to fulfil the offer obligations.

6.5.   Ensure and disclose the value of such instruments determined in terms of regulation 20(5).

 

ANNEXURE II

 

 

{All disclosures in terms of guidelines for “Delisting of securities” issued by SEBI}

 

 

 

ANNEXURE III

 

STATUS OF COMPLIANCE WITH THE PROVISIONS OF CHAPTER II OF THE TAKEOVER REGUALTIONS (as applicable)

 

By the promoters/Sellers/major shareholders/Acquirers, separately (as may be applicable)

 

Sl. No.

Regulation/

Sub- regulation

Due Date for compliance as mentioned in the regulation

Actual date of  of compliance

Delay, if any (in

no. of days)

Col. 4- Col. 3

 Remarks

1

2

3

4

5

6

1

6(1)

20.04.1997

 

 

 

2

6(3)

20.04.1997

 

 

 

3

8(1)

21.04.1998

 

 

 

4

8(2)

21.04.1998

 

 

 

5

8(1)

21.04.1999

 

 

 

6

8(2)

21.04.1999

 

 

 

7

8(1)

21.04.2000

 

 

 

8

8(2)

21.04.2000

 

 

 

9

8(1)

21.04.2001

 

 

 

10

8(2)

21.04.2001

 

 

 

11

8(1)

21.04.2002

 

 

 

12

8(2)

21.04.2002

 

 

 

13

7(1) & (2)

 

 

 

 

14

7(1A)&(2)

 

 

 

 

 

The data must be furnished separately for each of the 3 category of shareholders referred to above.

 

 

ANNEXURE IV

By the target company

 

Sl. No.

Regulation/

Sub- regulation

Due Date for compliance as mentioned in the regulation

Actual date of of compliance

Delay, if any (in

no. of days)

Col. 4- Col. 3

 Remarks

1

2

3

4

5

6

1

6(2)

20.05.1997

 

 

 

2

6(4)

20.05.1997

 

 

 

3

8(3)

30.04.1998

 

 

 

4

8(3)

30.04.1999

 

 

 

5

8(3)

30.04.2000

 

 

 

6

8(3)

30.04.2001

 

 

 

7

8(3)

30.04.2002

 

 

 

8

7(3)