GAMMON INDIA LIMITED

segment on the stock exchange but not through bulk/block deal/negotiated deal/preferential allotment, or
the increase in the shareholding or voting rights of the acquirer is pursuant to a buyback of shares by the
company; and (ii) the post acquisition shareholding of the acquirer together with persons acting in concert
with him shall not increase beyond 75%.
Where an acquirer who (together with persons acting in concert) holds 55% or more, but less than 75% of
the shares or voting rights (or, where the company concerned obtained initial listing of its shares by making
an offer of at least 10% of the issue size to the public pursuant to Rule 19(2)(b) of the SCR Rules, less than
90% of the shares or voting rights) in the company, intends to consolidate its holdings while ensuring that
the public shareholding in the target company does not fall below the minimum level permitted by the
listing agreement with the stock exchanges, the acquirer may do so only through an open offer under the
Takeover Code. Such open offer would be required to be made for the lesser of (i) 20% of the voting
capital of the company, or (ii) such other lesser percentage of the voting capital of the company as would,
assuming full subscription to the open offer, enable the acquirer (together with persons acting in concert),
to increase the holding to the maximum level possible, i.e. up to the delisting threshold (75% or 90%, as the
case may be).
The mandatory public offer requirements prescribed by the Takeover Code have also been made applicable
to acquisitions of global depository receipts where the holders of such global depository receipts become
entitled to exercise voting rights, in any manner, on the underlying shares.
In addition, regardless of whether there has been any acquisition of shares or voting rights in a company, an
acquirer cannot directly or indirectly acquire control over a company (for example, by way of acquiring the
right to appoint a majority of the directors or to control the management or the policy decisions of the
company) unless such acquirer makes a public announcement offering to acquire a minimum of 20% of the
shares of the company. In addition, the Takeover Code introduces the “chain principle” by which the
acquisition of a holding company will obligate the acquirer to make a public offer to the shareholders of
each of its subsidiary companies which is listed. However, the public announcement requirement will not
apply to any change in control which takes place pursuant to a special resolution passed by way of postal
ballot by shareholders. The Takeover Code sets out the contents of the required public announcements as
well as the minimum offer price. The minimum offer price depends on whether the shares of the company
are “frequently” or “infrequently” traded (as defined in the Takeover Code). In the case of shares which are
frequently traded, the minimum offer price shall be the highest of the:
(a) negotiated price under the agreement for the acquisition of shares or voting rights in the company;
(b) highest price paid by the acquirer or persons acting in concert with him/her for any acquisitions,
including through an allotment in a public, preferential or rights issue, during the 26-week period
prior to the date of the public announcement; or
(c) average of the weekly high and low of the closing prices of the shares of the company as quoted
on the stock exchange where the shares of the company are most frequently traded during the 26week
period prior to the date of the public announcement or the average of the daily high and low
of the prices of the shares as quoted on the stock exchange where the shares of the company are
most frequently traded during the two-week period prior to the date of the public announcement,
whichever is higher.
The open offer for the acquisition of a further minimum of 20% of the shares of a company has to be made
by way of a public announcement which is to be made within four working days of entering into an
agreement for the acquisition or the decision to acquire shares or voting rights exceeding the relevant
percentages or within four working days after the decision to make any such changes is made which would
result in acquisition of control.
The Takeover Code provides that an acquirer who seeks to acquire any shares or voting rights which would
result in the public shareholding in the target company being reduced to a level below the limit specified in
the listing agreement with the stock exchange for the purpose of listing on a continuous basis, shall take the
necessary steps to facilitate the compliance by the company with the relevant provisions of such listing
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