Executive Summary:
This SEBI circular, dated May 14, 2020, provides one-time relaxations from strict enforcement of certain regulations under the SEBI Takeover Regulations, 2011 and SEBI Buyback Regulations, 2018 due to the impact of the COVID-19 pandemic. These relaxations pertain to open offers and buyback tender offers opening up to July 31, 2020. The circular primarily addresses the service of offer-related materials and advertisement requirements.
Key Points / Main Content:
Electronic Transmission of Offer Materials:
* Electronic transmission of the letter of offer, tender form, and other offer-related material to shareholders is permitted.
* The letter of offer and tender form must be published on the websites of the company, registrar, stock exchanges, and managers to the offer.
* The acquirer company and lead managers must take adequate steps to reach shareholders through other means, such as post, SMS, or advertisements.
Advertisement Requirements:
* The acquirer company must publish an advertisement regarding the electronic dispatch and availability of the letter of offer and tender form.
* This advertisement must appear in the same newspapers as the detailed public statement (Takeover Regulations) or public announcement (Buyback Regulations).
* The acquirer company has the flexibility to publish the dispatch advertisement in additional newspapers.
* Advertisements can be disseminated through television channels, radio, and the internet, including crawlers/tickers.
* All advertisements issued should also be made available on the website of the company, Registrar, Managers to the offer, and Stock Exchanges.
Inspection of Documents:
* The acquirer company and the manager to the offer shall provide procedures for electronic inspection of material documents.
General:
* Attempts should be made to adhere to the existing prescribed framework as far as possible.
* The circular is effective immediately.
Impact Analysis:
Registered Merchant Bankers:
* Impact: Need to ensure compliance with the relaxed regulations regarding electronic transmission and advertisement of offer materials.
* Action Required: Update procedures to facilitate electronic transmission and online availability of documents, and assist acquirer companies in broader dissemination of information.
Recognized Stock Exchanges:
* Impact: Need to provide for the publishing of offer related material on their website.
* Action Required: Ensure their systems can accommodate the publication of letters of offer and tender forms.
Listed Entities (Acquirer Companies):
* Impact: Benefit from relaxed requirements for serving offer materials, but must adhere to additional steps for electronic dissemination and advertisement.
* Action Required: Implement procedures for electronic transmission, website publication, and alternative advertisement methods to reach shareholders.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body issuing the circular.
COVID19: The pandemic cited as the reason for the relaxations.
Central and State Governments: Refers to the governmental bodies that imposed lockdown measures.
SEBI Substantial Acquisition of Shares and Takeovers Regulations, 2011: Official name of the regulations, also referred to as Takeover Regulations.
SEBI Buyback of securities Regulations, 2018: Official name of the regulations, also referred to as Buyback Regulations.
Takeover Regulations: Short name for SEBI Substantial Acquisition of Shares and Takeovers Regulations, 2011.
Buyback Regulations: Short name for SEBI Buyback of securities Regulations, 2018.
Section 111 of the Securities and Exchange Board of India Act, 1992: The legal provision under which the circular is issued.
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Securities and Exchange Board of India
CIRCULAR
SEBI/CIR/CFD/DCR1/CIR/P/2020/83
May 14, 2020
To,
All Registered Merchant Bankers
All Recognized Stock Exchanges
All listed entities
Dear Sir/Madam,
Sub: Relaxations relating to procedural matters – Takeovers and Buy-back.
1. In view of the impact of the COVID-19 pandemic and the lockdown measures
undertaken by Central and State Governments, based on representations, the
following one time relaxations are granted from strict enforcement of certain
regulations of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
2011 (hereafter “Takeover Regulations) and SEBI (Buy-back of securities)
Regulations, 2018 (hereafter “Buy-back Regulations) pertaining to open offers and
buy-back tender offers opening upto July 31, 2020.
1.1. Service of the letter of offer and/or tender form and other offer related material to
shareholders may be undertaken by electronic transmission as already provided
under Regulation 18(2) of the Takeover Regulation and Regulation 9(ii) of Buy-
back Regulations subject to the following:-
1.1.1. The acquirer / company shall publish the letter of offer and tender form on the
websites of the company, registrar, stock exchanges and the manager(s) to
offer.
1.1.2. The acquirer / company along with lead manager(s) shall undertake all
adequate steps to reach out to the/its shareholders through other means such
as ordinary post or SMS or audio-visual advertisement on television or digital
advertisement, etc.
1.1.3. Further, the Acquirer/ Company shall make an advertisement containing details
regarding the dispatch of the letter of offer electronically and availability of such
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Securities and Exchange Board of India
letter of offer along with the tender form on the website of the company,
registrar and manager to the offer in the same newspapers in which (i) detailed
pubic statement was published as per regulation 14(3) of Takeover Regulation
or (ii) public announcements was published as per regulation 7(i) of Buy-back
regulation.
1.1.4. Further, the acquirer/ company may have the flexibility to publish the dispatch
advertisement in additional newspapers, over and above those required under
the respective regulations.
1.1.5. The acquirer/ company shall make use of advertisements in television
channels, radio, internet etc. to disseminate information relating to the
tendering process. Such advertisements can be in the form of crawlers/ tickers
as well.
1.1.6. All the advertisement issued should also be made available on the website of
the company, Registrar, Managers to the offer, and Stock Exchanges.
2. The acquirer/ company and the manager to offer shall provide procedure for
inspection of material documents electronically.
3. As far as possible, attempts will be made to adhere to the existing prescribed
framework.
4. This circular shall come into force with immediate effect.
5. This circular is issued in exercise of powers conferred by Section 11(1) of the
Securities and Exchange Board of India Act, 1992.
6. A copy of this circular is available on SEBI website at www.sebi.gov.in under the
categories “Legal Framework/Circulars”.
Yours faithfully,
Rajesh Gujjar
General Manager
Division of Corporate Restructuring-1
Corporation Finance Department
Email id: rajeshg@sebi.gov.in
+91-22-2644 9232
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