Answer-Under the SEBI (SAST) Regulations, 2011, the MINIMUM CONSIDERATION payable to the shareholders in a...

Regulation 8 of the SEBI SAST Regulations, 2011 prescribes the MINIMUM OFFER PRICE as the HIGHEST of several parameters - including the highest negotiated price, the volume-weighted average price during the 60 TRADING DAYS preceding the date of the public announcement the VWAP, and the parameters for controlling acquisitions - so that minority shareholders receive an adequate and fair exit price reflecting recent market valuations. The 60-trading-day VWAP is the central quantitative anchor of takeover pricing. Adequate consideration protects public shareholders on a change of control. This pricing formula is the defining numeric architecture of the Takeover Code.

Question

Under the SEBI (SAS

T Regulations, 2011, the MINIMUM CONSIDERATION payable to the shareholders in a MANDATORY OPEN OFFER is computed, inter alia, by reference to the highest of certain parameters, including:

A Only the face value of the shares

B The price fixed by the target company

C The nil consideration in case of a gift

D The volume-weighted average price of the shares during the 60 trading days preceding the announcement, among the prescribed pricing parameters

Practice Next