Markets regulator Sebi on Friday exempted Sameer Gehlaut IIS Trust from making an open offer following its proposed acquisition of shares in Yaarii Digital Integrated Services Ltd (earlier known as Indiabulls Integrated Services Ltd).
Sebi noted that the objective of the proposed acquisition is to achieve efficient succession planning as well as for holding the controlling interest in Yaarii Digital Integrated Services (target company) in one entity rather than spreading the holding among different individuals which may not be in the best interest of the company.
Efficient succession planning for the next generation is being facilitated through the acquirer trust, the regulator said in its order.
The order came after Sebi received an application from the trustees of Sameer Gehlaut IIS Trust seeking exemption from the applicability of SAST (Substantial Acquisition of Shares and Takeovers) Regulations in the matter of proposed acquisition of shares in Yaarii Digital Integrated Services.
Sameer Gehlaut and his associates' companies are the promoters of Yaarii Digital Integrated Services. The total promoter and promoter group own 43.25 per cent shareholding in the company.
An application has been filed before National Company Law Tribunal, Chandigarh (NCLT) for approval of Scheme of Amalgamation of Powerscreen Media, Jyestha Infrastructure, Calleis Real Estate Private Limited, Calleis Properties , Calleis Constructions, Karanbhumi Estates, Kritikka Infrastructure and other promoters companies with Meru Minerals Private Limited in April 2019.
Further, an application has been filed before NCLT for approval of the Scheme of Amalgamation of Dahlia Infrastructure and other promoter companies with Galax Minerals in March, 2019.
Post-approval by NCLT and effectiveness of the two schemes, Meru Minerals will hold 3,84,83,988 fully paid shares of the target company, representing 43.08 shareholdings.
Under the proposed acquisition, Sameer Gehlaut proposes to settle or gift, without consideration, 100 per cent shares of Meru Minerals in the Sameer Gehlaut IIS Trust.
Assuming that the schemes will be approved by NCLT prior to the proposed acquisition, the trust will indirectly hold a 43.08 per cent stake in Yaarii Digital Integrated Services through Meru Minerals.
In case the schemes are not approved by the NCLT prior to the proposed acquisition, Sameer Gehlaut will settle or gift, without consideration, 100 per cent shares of Meru Minerals, Calleis Real Estate and Karanbhumi Estates in Sameer Gehlaut IIS Trust and accordingly, the trust will 43.08 per cent stake in the target firm through Meru Minerals, Calleis Real Estate and Karanbhumi Estates.
The proposed transaction will attract the obligation to make an open offer under the takeover regulations and accordingly exemption was sought from the regulator.
In its order, Sebi said there will be no change in control of the firm pursuant to the proposed acquisition.
The pre-acquisition and post-acquisition shareholding of the promoters and promoter group in the company will remain the same. Besides, there will also be no change in the public shareholding of the company.
Accordingly, the regulator has granted "exemption to the proposed Acquirer, viz. Sameer Gehlaut IIS Trust from complying with the requirements ... of the Takeover Regulations 2011 with respect to the proposed direct acquisitions in the Target Company, (through Meru Minerals Pvt. Ltd.) by way of proposed transaction".
The exemption is subject to certain conditions, including compliance with the provisions of the Companies Act and other norms.
It, further, said the exemption granted is limited to the requirements of making an open offer under the takeover regulations and will not be construed as an exemption from the disclosure requirements under compliance with the PIT (Prohibition of Insider Trading) norms and LODR (Listing Obligations and Disclosure Requirements) Regulations.
In a separate order, Sebi has exempted Mittal Business Holdings Trust from open offer obligation with respect to the proposed direct and indirect acquisitions in Greenply Industries.
The exemption has been granted as the proposed acquisition is aimed at achieving efficient succession planning, the order noted.
Pursuant to the proposed acquisitions, the trust would directly hold in 57,64,800 (4.69 per cent)equity shares in Greenply Industries and would indirectly exercise control of 26.85 per cent shares through S.M. Management Pvt. Ltd.
In aggregate the trust would acquire control over 31.54 per cent stake in the company