2025 (3) TMI 204 - SC - SEBI

Public offer date - Determination of date on which a public announcement of an open offer in terms of clause (1) to Regulation 20 has been made - It is the case of the appellants that the date on which the public announcement was made would be 18.01.2025 - case of the private respondents that the public offer date must be taken as 03.10.2023 and therefore the application filed by the appellants is belated and beyond time. HELD THAT - Clause (9) of Regulation 20 states that upon the public announcement of a competing offer an acquirer who had made the preceding offer shall be entitled to revise the terms of his open offer provided the revised terms are more favourable to the shareholders of the target company. The acquirers making the competing offers shall be entitled to make upward revisions of the offer price at any time up to one working day prior to the commencement of the tendering period. The tendering period we are informed has come to an end today that is on 07.02.2025. During the course of arguments it was noted that there have been several attempts to stall the public offer but without success. We have noted the said aspect but at the same time we have also taken into account the fact that the application filed by the appellants is still pending consideration by the SEBI and has not been disposed of. SEBI would be more concerned about public investors and their rights and interests. The main question that arises and has to be decided by the SEBI relates to the date of public announcement of the open offer as contemplated in Regulation 20(1) of the 2011 SEBI Regulations. The second question would be whether or not to grant exemption if the situation requires it. Third issue relates to the public offer price. It is pointed out by the private respondents that they deposited a sum of 330 crores way back on 26.09.2023 in an escrow account. Keeping all the aforesaid facts in mind we are inclined to pass the following order - 1. The appellant Digvijay Laxhamsinh Gaekwad (Danny Gaekwad) or their nominee/applicant before SEBI as suggested by his counsel shall deposit a sum of 600 crores in terms of the 2011 SEBI Regulations in the form of cash and/or bank guarantee on or before 12.02.2025. In case the amount is not deposited by the said date the directions in the present order shall be automatically vacated without further reference to the Court. 2. The public offer which is to close today will be continued till 12.02.2025. In case the appellant Digvijay Laxhamsinh Gaekwad (Danny Gaekwad) or their nominee/applicant before SEBI deposits 600 crores in terms of the 2011 SEBI Regulations the offer will continue till the end of third day post the date of the order to be passed by SEBI on the application of the appellants. 3. A party aggrieved by the order passed by SEBI would be entitled to take recourse to an appropriate remedy. Present directions are in the nature of an interim order.

Summary

The primary issue in this case concerns the date of the public announcement of an open offer under Regulation 20 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 ("2011 SEBI Regulations"). The private respondents argue that the date should be 25.09.2023, while the appellants claim it to be 18.01.2025. The appellants emphasize that the purpose of the public offer is to enable shareholders to sell their shares to the acquiring group. The Securities and Exchange Board of India ("SEBI") is yet to determine the public offer date and has requested the appellants to seek exemption under Regulation 11 of the 2011 SEBI Regulations.Regulation 20(9) allows an acquirer to revise the terms of their open offer upon the announcement of a competing offer, provided the revised terms are more favorable to the target company's shareholders. The tendering period ended on 07.02.2025, with attempts to delay the public offer being unsuccessful. SEBI's main concerns revolve around determining the public offer date, potentially granting exemptions, and setting the public offer price.The private respondents deposited 330 crores on 26.09.2023 in an escrow account. The Court orders the appellant or their nominee to deposit 600 crores by 12.02.2025 in compliance with the 2011 SEBI Regulations. Failure to do so will result in the automatic vacation of the directions. The public offer deadline is extended to 12.02.2025, subject to the deposit of 600 crores. Parties dissatisfied with SEBI's decision may seek appropriate remedies. The Court clarifies that the order is interim, pending further proceedings before the High Court and SEBI, and should not be considered a precedent.In conclusion, the Court's decision revolves around the deposit requirements, extension of the public offer deadline, and the interim nature of the order. The resolution of the public offer date, potential exemptions, and offer price remain pending before SEBI, emphasizing the importance of protecting public investors' rights and interests.