OPEN OFFERS IN 6 YR HIGH

The capital market regulator has approved open offers for shares worth Rs 7,155 crore in the April-May period of current fiscal, the highest for the period in the past six years. As per the latest data compiled by Securities and Exchange Board of India (Sebi), the market regulator approved a total of 16 open offers to the public shareholders in listed firms for shares, worth Rs 7,155 crore, in the first two months of the current fiscal. This is the highest cumulative amount for open offers made since Rs 18,180 crore (for 17 open offers) in first two months of fiscal 2007-08.
Open offers are made by the company promoters and other entities for either consolidation of their holdings, as part of substantial acquisition, or change in control of management in listed firms. The Sebi rules require a mandatory open offer for minority shareholders in the event of any major change in the promoter holding of a listed company, including in the wake of any direct or indirect acquisition of 25 per cent.
Such open offers are required for acquisition of up to 26 per cent stake from public shareholders. Out of the 16 open offers in April-May 2013, 15 offers amounting to Rs 7,129 crore were made towards consolidation of holdings. One offer (for Rs 26 crore) was made for change in control of management.
No offers have been made for substantial acquisition of shares so far in 2013-14, Sebi said in its monthly report. In May alone, six public offers with total value of Rs 153 crore were made to public against 10 public offers with total value of Rs 7,003 crore in the preceding month.
"All the six public takeover offers during May 2013 were for Consolidation of Holdings," the regulator said. Five companies, GMM Pfaudler, Rhodia Specialty Chemicals India, Gee El Woolens, Southern Fuel and Surnidhi Investment had closed their open offers in May.