SEBI will amend its takeover regulations to ease the path for a possible acquisition of Satyam Computer and also to provide for such extraordinary cases in the future. The SEBI Board recognised the special circumstances that have arisen in Satyam and concluded that the amendments must be made in a general context rather than in a specific case.
The exemptions sought by Satyam relate to the open offer price in case of a takeover, as several companies — Larsen & Toubro and Spice Group included — have shown interest in buying the company.
An offer price under the current regulations would be the higher of the six-month and the 2-week averages of the market price of Satyam, working out to be much higher than the current market price of the stock.
The Satyam stock sank like a stone on January 7 upon its promoter’s confession of a fraud in his company. It has gained a little since then, on the back of speculation that there might be a takeover.
Further in view of falling stock prices, the SEBI Board tightened the norms for issue of preferential warrants, raising the upfront payment to 25 per cent from 10 per cent. This is to make sure that falling market prices are not going to make it a cakewalk for promoters to raise stakes in their own companies.
On the IPO front, SEBI eased rules, allowing companies to announce their price-band even up to two days before the opening date of the issue. The price bands are usually announced in the Red Herring Prospectus about two weeks before the opening date.
The timelines for bonuses has also been reduced to 15 days between the Board decision and completion of bonus issue, when the articles of the company don’t call for shareholder approval. Where shareholder approval is required, the time line is 60 days. Earlier it was six months for both.
The Board of SEBI also decided that companies will announce their dividends on a “per-share” basis and not on percentage basis. The latter has the potential to mislead investors as the face value of share prices vary. Since EPS and the market price are all quoted on a per share basis, this would also bring in uniformity to company announcements.crackcrack| Company Name | CMP |
|---|---|
| TCS | 2563.55 |
| Infosys | 1313.50 |
| HCL Tech. | 1439.60 |
| Wipro | 209.05 |
| Tech Mahindra | 1484.35 |
| View more.. | |
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