Offer of Takeover of a Company Other Than a Listed Company as a Result of Compromise or Arrangement
11 (1) The takeover offer under sub-section (11) of section 230, whether by existing shareholder or not, at a price determined by registered valuer as approved by shareholders:
Provided that where the company, being acquired is regulated under a special Act, approval of the regulatory body constituted or established under that Act as required under such act, shall also be obtained.
Explanation- For the purposes of this rule, ‘takeover’ means :-
a) acquisition of control of a company other than a listed company pursuant to a scheme of compromise or arrangement under section 230; or
b) acquisition of fifty percent or more of the total share capital of a company other than a listed company pursuant to a scheme of compromise or arrangement under section 230.
(2) The person making the takeover offer shall enter into Memorandum of understanding or an Agreement with the shareholders of the company being so acquired and such Memorandum or Agreement for takeover shall be annexed to the notice of the general meeting and shall, inter alia, contain-
(a) Name, address and details of the person making such takeover offer;
(b) shares/ voting rights already held by such person;
(c) proposed date of executing the transaction;
(d) total paid-up share capital of the company being acquired;
(e) total number and percentage of shares/ voting rights proposed to be acquired;
(f) price offered for the purchase of the shares;
(g) mode of payment of consideration (whether in cash or for consideration other than cash)
(h) objects and purpose of the acquisition of the shares;
(i) statement to the effect that the interest of the creditors, secured or unsecured, and of the employees will not be adversely affected by the takeover;
(j) other terms and conditions of the offer.
(3) The takeover shall become effective only when it is approved by the company by passing a special resolution in the general meeting:
Provided that where any term loan is subsisting, prior approval of the concerned bank or public financial institution shall be obtained before passing such special resolution.
(4) The details of the offer, as are mentioned in the Memorandum of Understanding or Agreement for takeover forthwith after sending the notice of the meeting, be:
(a) sent to all the creditors, debenture holders, trustee(s) and deposit holders of the company;
(b) published at least once in English language in a leading English newspaper and in vernacular language in one vernacular newspaper having wide circulation in the State in which the registered office of the company is situate; and
(c) placed on the website of the company, if any.
(5) If such takeover is being made by a listed company, a copy of such offer shall be sent to the Stock Exchanges and be placed on the website of the Company, if any.
(6) Where the shares/ voting rights are to be acquired for consideration other than cash, the valuation of such consideration shall be done by a registered valuer who shall submit a valuation report to the company giving justification for the valuation. The valuation report shall be sent along with the notice of the said general meeting.
(7) The dissenting shareholders of the company being acquired shall be given an exit offer at a price determined by a registered valuer or at a price negotiated by both the parties to such takeover under sub-rule (1), whichever is higher.
(8) Notwithstanding anything, contained in sub-sections (1) to (9) of section 230, shall apply to takeover of an unlisted company if the conditions specified in this rule are complied with.
However, if any shareholder or any other stakeholder has any grievance with respect to such takeover offer, he may file his objections with the Tribunal in accordance with sub-section (12) of section 230. |