Which transaction can trigger an open offer under regulation 4 of the SEBI Takeover Regulations even without an acquisition of shares or voting rights, assuming no exemption applies?
Question and options
Which transaction can trigger an open offer under regulation 4 of the SEBI Takeover Regulations even without an acquisition of shares or voting rights, assuming no exemption applies?
An increase in the target’s authorised share capital without a change in control
A purchase of listed debt without management rights
An acquisition of a non-controlling small stake
An acquisition of control over the listed target
Answer and explanation
Regulation 4 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 requires a public announcement of an open offer by anyone who directly or indirectly acquires control over a target company, whether or not shares or voting rights are acquired. A small stake below the regulation 3 thresholds, listed debt without management rights, or a mere increase in authorised capital does not by itself trigger an offer.
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