(I) For the purpose of disclosures to be made by acquirer(s):ДЄ person who, along with вЂpersons acting in concertвЂ™ (PAC), if any, acquires shares or voting rights (which when taken together with his existing holding) would entitle him to more than 5% or 10% or 14% shares or voting rights of target company, is required to disclose the aggregate of his shareholding or voting rights to the target company and the Stock Exchanges where the shares of the target company are traded within 2 days of receipt of intimation of allotment of shares or acquisition of shares.Дў) More than 15% shares or voting rights:ДЄn acquirer, who holds more than 15% shares or voting rights of the target company, shall within 21 days from the financial year ending March 31 make yearly disclosures to the company in respect of his holdings as on the mentioned date. The said SEBI Regulations have discussed this aspect of вЂsubstantial quantity of shares or voting rightsвЂ™ separately for two different purposes: Here the term вЂsubstantial acquisition of sharesвЂ™ attains a very vital importance, irrespective whether the corporate restructuring is through merger / acquisition / takeover. ) acquires substantial quantity of shares or voting rights of the target company.

Neither the term вЂtakeoverвЂ™ nor the term вЂhostileвЂ™ has been expressly defined under the said Regulations, the term basically envisages the concept of an:

SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 1997 has been enacted by the Securities and Exchange Board of India which deals with acquisition of shares, takeovers, etc. It primarily, only talks about Mergers & Amalgamations through Section 391-396. That is why it is observed that so many corporations have subsidiaries that do not have anything in common - they were bought purely for financial reasons.Д¬ompanies Act 1956 does not expressly mention about takeovers or acquisitions. If a company can make $100 million in profits each year, then buying that company for $200 million makes sense. The acquiring company may think that the target company can generate more profit in the future than the selling price. The major reason may be of financial gain instead of economic or business gain. There are several reasons why a company might want or need a hostile takeover. In India, hostile takeover is a dreaded word, may be since it is a method used which is not democratic in nature and somewhat unpleasant for the management of a target company. through which Corporate restructuring may be done. There are other methods like Mergers & Acquisitions, Leveraged Buyout, Spin offs, etc. Hostile Takeovers is a type of method used for Corporate Restructuring. The word вЂhostileвЂ™ in dictionary means вЂunfriendly, aggressiveвЂ™. In other words, the Acquirer intends to gain control of the Target Company and force it to agree to the sale. Hostile Takeover is a type of acquisition in which, the company being purchased (Target Company) does not want to be purchased at all, or does not want to be purchased by a particular buyer (Acquirer) that is making a bid.

The grant of this option shall not affect in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge or to consolidate or to dissolve, liquidate or sell, or transfer all or any part of its business or assets.This article has been published in вЂSanhitaвЂ™ - a corporate issues magazine - by the Pune Chapter of The Institute of Company Secretaries of India (ICSI) in July 2008 As used herein, ' hostile change of control' shall mean: (i) the acquisition or accumulation of twenty percent (20%) or more of the Company's outstanding shares of common stock by any person, entity, or group pursuant to a published offer to the Company's shareholders, or any merger or consolidation with any other corporation, where the transaction in question was not either initiated by the Company, or certified as ' friendly' in a resolution by the Company's Board of Directors passed by the affirmative vote of at least eighty percent (80%) of all directors or ( ii) the election of a director or directors not endorsed by the Company's Board of Directors. In the event of a hostile change in control of the Company, the option provided for in this Agreement shall become immediately exercisable in full, provided the Optionee is employed by the Company at such time.

What is a hostile takeover