Brief Provisions of Sebi (sast) Regulations, 2011

Brief provisions of SEBI (SAST) Regulations, 2011

A. Public Announcement:

I. Regulation 3(1):

Regulation 3(1) states the ‘substantial acquisition of shares or voting rights’. It says, no acquirer shall acquire shares or voting rights in a target company which taken together with shares or voting rights, if any, held by him and by persons acting in concert with him in such target company, entitle them to exercise twenty-five percent or more of the voting rights in such target company unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations.

II. Regulation 4:

Regulation 4 states the ‘acquisition of control’. It says, irrespective of acquisition or holding of shares or voting rights in a target company, no acquirer shall acquire, directly or indirectly, control over such target company unless the acquirer makes a public announcement of an open offer for acquiring shares of such target company in accordance with these regulations.

III. Regulation 5(1):

Regulation 5(1) states the ‘indirect acquisition of shares or control’. It says, for the purposes of regulation 3 and regulation 4, acquisition of shares or voting rights in, or control over, any company or other entity, that would enable any person and persons acting in concert with him to exercise or direct the exercise of such percentage of voting rights in, or control over, a target company, the acquisition of which would otherwise attract the obligation to make a public announcement of an open offer for acquiring shares under these regulations, shall be considered as an indirect acquisition of shares or voting rights in, or control over the target company.

IV. Regulation 15(1):

Regulation 15(1) states the ‘contents of open offer’. It says, the public announcement shall contain such information as may be specified, including the following,—

1. name and identity of the acquirer and persons acting in concert with him;
2. name and identity of the sellers, if any;
3. nature of the proposed acquisition such as purchase of shares or allotment of shares, or any other means of acquisition of shares or voting rights in, or control over the target company;
4. the consideration for the proposed acquisition that attracted the obligation to make an open offer for acquiring shares, and the price per share, if any;
5. the offer price, and mode of payment of consideration; and
6. offer size, and conditions as to minimum level of acceptances, if any.

What are the details of public announcement according to this case?

Open offer (“Offer” / “Open Offer”) for acquisition of up to 2,36,49,767 fully paid-up equity shares of face value of INR 10 each (“Equity Share”), representing 21.23% of the fully diluted voting equity share capital of Xchanging Solutions Limited (“Target Company”) from all the Public Shareholders (defined below) of the Target Company by Xchanging Technology Services India Private Limited (“Acquirer”) along with Computer Sciences Corporation India Private Limited (“PAC 1”) and DXC Technology Company (“PAC 2”) (PAC 1 and PAC 2 are collectively referred to as “PAC”) in their capacity as persons acting in concert with the Acquirer.

Manager to the offer (“Manager”): JM Financial Institutional Securities Limited

The public announcement is done by the Manager for and on behalf of the Acquirer and PAC to the public shareholders pursuant to and in compliance with the SEBI SAST Regulations (2011).

Offer Size: Up to 2,36,49,767 fully paid up Equity Shares representing 21.23% of the fully diluted voting equity share capital of the Target Company (“Voting Share Capital”) from the public shareholders, as of the 10th working day from the closure of the tendering period for the Offer.

Price consideration: A price of INR 55.22 per Equity Share (“Offer Price”) amounting to a total of INR 130,59,40,134. The Offer Price has been calculated in accordance with Regulation 8(12) of the SEBI (SAST) Regulations.

Mode of Payment (cash/security): Open offer price will be paid in cash by the Acquirer in accordance with SEBI (SAST) Regulations 9 (1) (a). 

Type of offer (Triggered offer, voluntary offer/competing offer, etc.): The Offer is a triggered offer made by the Acquirer and the PAC in compliance with Regulations 3(1), 4 and 5(1) of SEBI (SAST) Regulations. The thresholds specified under Regulation 5(2) of the SEBI (SAST) Regulations are not applicable. This Offer is not subject to any minimum level of acceptance.

B. Detailed Public Statement:

I. Regulation 13(4):

Regulation 13(4) talks about the ‘timing of the open offer process’. It says, pursuant to the public announcement made under sub-regulation (1) and sub-regulation (3), a detailed public statement shall be published by the acquirer through the manager to the open offer in accordance with regulation 14 and regulation 15, not later than five working days of the public announcement: Provided that the detailed public statement pursuant to a public announcement made under clause (e) of sub-regulation (2) shall be made not later than five working days of the completion of the primary acquisition of shares or voting rights in, or control over the company or entity holding shares or voting rights in, or control over the target company.

Explanation-It is clarified that in the event the acquirer does not succeed in acquiring the ability to exercise or direct the exercise of voting rights in, or control over the target company, the acquirer shall not be required to make a detailed public statement of an open offer for acquiring shares under these regulations.

II. Regulations 14(3):

Regulation 14 talks about the ‘publication of open offer’. It says, the detailed public statement pursuant to the public announcement referred to in sub-regulation (4) of regulation 13 shall be published in all editions of any one English national daily with wide circulation, any one Hindi national daily with wide circulation, and any one regional language daily with wide circulation at the place where the registered office of the target company is situated and one regional language daily at the place of the stock exchange where the maximum volume of trading in the shares of the target company are recorded during the sixty trading days preceding the date of the public announcement.