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SEBI examines open offer possibility in Vodafone-Idea merger deal

July 13, 2017

The Securities and Exchange Board of India (SEBI) is examining whether the proposed merger between Vodafone India and Idea Cellular will trigger an open offer under the takeover rules. The takeover code stipulates that if an entity acquires 25 per cent of a listed firm, it has to make an open offer for an additional 26 per cent from public shareholders.

As per the plan submitted to SEBI, in the new combined entity, Vodafone will initially hold a 50 per cent stake, while the Aditya Birla Group and public shareholders will hold 21.1 per cent and 28.9 per cent, respectively. Vodafone will then divest a 4.9 per cent stake to the Aditya Birla Group. This will take the Aditya Birla Group’s stake from 21.1 per cent to 26 per cent, thus crossing the threshold for an open offer.

Meanwhile, SEBI is also learnt to have sought clarifications regarding purchases of Idea Cellular’s stock by Pilani Investment and Industries Corporation, part of the Aditya Birla Group, ahead of an official announcement regarding merger discussions.


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