Sebi grants exemption to govt from making open offer to Union Bank of India's shareholders
However, the exemption would be subject to certain conditions, including a requirement for increasing the public shareholding in the bank to 25 per cent to comply with minimum public shareholding norms, as undertaken.
The Sebi order for exemption comes following an application filed by the bank in November on behalf of its promoter, Government of India, seeking exemption from the applicability of Substantial Acquisition of Shares and Takeovers (SAST) norms or Takeover Regulations.
"The infusion of additional capital by the proposed acquirer/ promoter is stated to enable the target company (government) to meet regulatory capital norms. Accordingly...exemption as sought for in the application made by the target company, be granted to the proposed acquirer/promoter, subject to the conditions," Sebi said.
The central government has proposed to infuse capital worth Rs 11,768 crore in the lender against allotment of equity on preferential basis in favour of it.
Currently, the government holds 74.27 per cent stake in Union Bank and the proposed allotment of 165.98 crore equity shares of the lender would increase its stake by 12.48 per cent to 86.75 per cent, triggering an open offer mandatory under the Takeover Regulation.
The public shareholding would be required to be increased subsequently to fulfill the condition put forth by Sebi for exemption.
"There will be no change in control of the target company pursuant to the proposed acquisition as the change will only be in the quantum of shares held by the proposed acquirer/promoter," Sebi said.
"Further, there will be no change in the number of equity shares held in the target company, by the public shareholders, pursuant to the proposed transactions," it said.
Accordingly, the regulator granted exemption to the government from complying with the requirements of Takeover Regulations. SRS RVK
(This story has not been edited by Business Insider and is auto-generated from a syndicated feed we subscribe to.)
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