Sebi to relax open offer pricing rules only for cos under CLB

Acquirer May Now Require To Infuse Capital Into The Co To Avail Relaxation

THE new rules being proposed by capital market regulator Sebi, relating to an exemption on openoffer pricing norms for cases similar to Satyam, may well be restricted to companies which are being managed under the direction of the Company Law Board, or to specific cases where the court has issued directions on the running of a company.
    According to the proposal being considered now, a set of conditions, or criteria, would be listed for an acquirer to take advantage of easier pricing norms on open offers. These could include a stipulation that the acquirer would infuse capital into the company, which is being sought to be taken over, and that a request for a waiver from the pricing norms should come from the board of the firm which is being taken over, a person privy to the discussions on the new rules said.
    The Sebi board had discussed the issue in its last meeting and a final view on the new set of rules is expected to be taken soon. The regulator is likely to insist that fresh capital should be infused into any firm which wishes to avail of the proposed relaxation, including Satyam, the person quoted earlier said. Going by the proposal now being vetted, there could well be a condition that the request for a relaxation on the pricing norms should come from the board, which in Satyam's case has been constituted under the aegis of CLB.
    Sebi has said it wants to work out a transparent mechanism to arrive at an open offer price. The decision to tweak the open offer pricing norms was taken by the Sebi board, following a request from the government-appointed Satyam Board.
    Sebi chairman CB Bhave has gone on record saying he recognises the special situation that Satyam finds itself in. So, a provision would be created in the guidelines to deal with such cases in future. But the regulator is mindful of the fact that it does not want to formulate a new set of rules tailored only to suit a case such as Satyam's.
OFFER OPEN
A set of conditions to be listed for an acquirer to take advantage of easier pricing norms on open offers
Sebi has said it wants to work out a transparent mechanism to arrive at an open offer price