Barbarians at the Gate - New 'Takeover Code' Proposed in India - Era of 'Takeovers' - July, 2010

Abstract

One of the significant revisions suggested is that the takeover committee has suggested for an open offer size to be revised from the current 20% level to 100% level. Further, as per the suggestions, if as part of the response of the open offer, if the acquirer's stake reaches to 90%, then the company can be even delisted.With this revision, we may be about to witness era of in India. If promoters co-operate, will be friendly. Otherwise, the can be hostile. Either way, the stage is all set for takeovers in India.Several high-profile Indian companies are appearing to be vulnerable and susceptible for the eventuality of takeovers.Especially, the risk of takeover bids is higher from the foreign acquirers in comparison to the Indian acquirers. This is because of the larger financial muscle of the foreign acquirers. This is also because of the access to the several modes of funding options the foreign acquirers have in comparison to the Indian acquirers.In either ways, if these suggestions become rules, its appearing that Indian corporate world will surely come into the Buyout Radar of large global hedge funds and buyout funds.