Securities and Exchange Board of India (‘SEBI’) has amended the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (‘SAST Regulations’) by way of its Notification dated November 9, 2022. The key changes are set out below :

i.    Amendment in respect of the offer price in the context of disinvestment of public sector undertaking :

In case of direct or indirect acquisition of shares or voting rights, or control of the target company, which triggers an open offer, the offer price is determined as the highest of certain prices as set out in Regulation 8. One of these prices to be considered is the ‘volume-weighted average market price of the shares for a period of 60 trading days immediately preceding the date of the public announcement on the stock exchange where the maximum trading volume is recorded during such period, and such shares are frequently traded shares’. Pursuant to the amendment, the above offer price criterion is not required to be considered for determination of offer price in case of disinvestment of a public sector undertaking (‘PSU’) by the Central or a State Government, provided such disinvestment is resulting in a change of control of such PSU.

ii.    Amendment in respect of completion of acquisition prior to the expiry of the offer period, by way of providing unconditional and irrevocable bank guarantee :

The amended Regulation 22(2) inter alia provides that the parties to an agreement that triggers an open offer obligation may now, after 21 working days from the date of publication of the detailed public statement, act upon and complete the transaction under such an agreement if the acquirer provides an unconditional and irrevocable bank guarantee issued in favour of the manager to the open offer from any scheduled commercial bank (as specified in the amendment), subject to approval from the Reserve Bank of India (‘RBI’), of an amount equivalent to the entire consideration payable under the open offer, assuming full acceptance of the open offer.