The Times News Network today reported on the possible findings and suggestions of a committee set up by SEBI (Securities And Exchange Board Of India) which could have a significant impact on the M&A market within the country. According to the news agencies, the panel is expected to announce some significant changes including changes in the distribution or abolishing altogether the “Non-Compete Fees” which is usually paid to promoters as part of the acquisition deal. While the details of the announcements will become clearer over the coming days here is a quick overview of the expected changes:

• The non-compete fee which makes up almost a quarter of the deal value may be done away with altogether in an open offer.

• The open offer trigger will be hiked to 25% from the existing 15%. The voluntary offer size would be changed to a minimum of 10% and a maximum of 75% now.

• For takeovers by statutory open offers, the acquiring entity may be required to make an open offer to take control of 100% of the company’s equity instead of the current 35% which is required to take control of a company.

• Share swaps will be accepted as a payment mode in case of a 100% offer.

More details on the recommendations around the new takeover code can be found here.

The changes to the acquisition norms will have implications on deal structures and offer structuring going forward as these are implemented over due course. While initial reactions from shareholders seem positive and significant industry leaders agree the offer guidelines needed an overhaul after been unchanged for some time now, we all agree the changes are quite significant. We would love to hear your opinion on the recommendations. What is your take on this?