Takeover of Companies

Takeover of Companies

• 1.
  TAKEOVER OF COMPANIES Guided by – Mr. Himal Parikh Submitted by – Prashant Maharshi
• 2.
  WHAT IS TAKEOVER??? •General term referring to transfer of control of a firm from one group of shareholders to another group of shareholders. Change in the controlling interest of a corporation, either through a friendly acquisition or an unfriendly, hostile, bid. • When an "acquirer" takes over the control of the "target company", it is termed as Takeover. • When an acquirer acquires "substantial quantity of shares or voting rights" of the Target Company, it results into substantial acquisition of shares.
• 3.
  SEBI GUIDELINES FORTAKEOVER • As per 2011 takeover code, its mandate for an acquire to place an offer for at least 26% of the total shares of the target company. • An acquirer with 15% shareholding and increasing it by another 20% through an open offer would have only got a 35% shareholding in the target company . • An acquirer with a 25% shareholding and increasing it by another 26% through the open offer under the Takeover Code of 2011 can accrue 51% shareholding. • The regulation further talks about acquirers who already have 55% or more shares but less than 75% shares of the target company but intend to acquire more shares, this can only be done if the acquirer makes a public announcement in this regard.
• 4.
  WHY TAKEOVER ISDONE??? • To gain opportunities of market growth more quickly than through internal means. • To seek to gain benefits from economies of scale. • To seek to gain a more dominant position in a national or global market. • To acquire the skills or strengths of another firm to complement the existing business. • To acquire a speedy access to revenue streams that it would be difficult to build through normal internal growth. • To diversify its product or service range to protect itself against downturns in its core markets.
• 5.
  SOME CASE STUDIESON TAKEOVER
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  PANKAJ PIYUSH TRADE& INVESTMENT LTD • Name of the Acquirer – Mr. Vinod Kumar Bansal. • No. of shares – 1,04,000 equity shares. • Price for shares – Rs. 34 per share. • Date – April 17, 2012. • Name of the Target Company – Pankaj Piyush Trade & Investment Ltd • Reasons to Acquire – 1. In the last 3 years, the target co. has achieved very low turnover & profit after tax. Even EPS is very Low. 2. The fair value of shares issued by Avesh Patel (C.A.) is Rs. 33.53 per equity share which is lower than the offer price of Rs. 34 per equity share. 3. There has been no trading of shares on BSE. Thus it’s highly illiquid on BSE. It will provide an exit opportunity to the existing shareholders.
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  M/S SURABHI CHEMICALS& INVESTMENTS LIMITED • Name of the Acquirer – M/s. Mahadhan Vincom Pvt. Ltd, Mr. Bishnu Dutt Goenka, Mrs. Bina Agarwal & Mr. Santosh Sharma. • No. of shares – 2,98,079 equity shares. • Price for shares – Rs. 232 per share. • Date – 26 March, 2012. • Name of the Target Company – M/s. Surabhi Chemicals & Investment Ltd. • Size of the offer - Rs. 6,91,54,328. (No. of shares X Price for shares)
• 8.
  ESAB INDIA LIMITED •Name of the Acquirer – Colfax Corporation. • No. of shares – 40,02,185 equity shares. • Price for shares – Rs. 550.10 per share. • Date – 19 March, 2012. • Name of the Target Company – ESAB Indi Ltd. • Size of the offer - Rs. 2,201.60 million.
• 9.
  SHARP TRADING &FINANCE LIMITED • Name of the Acquirer – Mr. Tarachand Varma • No. of shares – 2,45,000equity shares. • Price for shares – Rs. 185 per share. • Date – 02 April,2012. • Name of the Target Company – Sharp Trading & Finance Ltd. • Book value per share – Rs.6.16.
• 10.
  Hostile Takeover like… •BAT v/s ITC • L&T v/s RIL • Swraj Paul v/s Escorts & DCM This were some great case studies on Takeover which would be helpful for students to understand Takeover in detail.
• 11.
  Thank You…