Public M&A: New Delisting Norms – What is the Excitement Really About?

Public M&A: New Delisting Norms – What is the Excitement Really About?

Key Takeaways

  • SEBI’s Consultation Paper proposes a comprehensive review of counter-offer mechanism, counter-offer price discovery mechanism, fixed price mechanism, floor price and reference date
  • Fixed price delisting, largely regarded as a welcome move, fails to excite us and appears lackluster against the present reverse book building mechanism due to absence of a counter-offer mechanism
  • Revised counter-offer price discovery mechanism unlikely to serve the purpose and might result in a price which may be unworkable after all
  • Addition of “Adjusted Book Value” as a component for determination of floor price is a positive move for the shareholders of asset-heavy companies where market linked pricing may not always be the best benchmark of floor price
  • Adjusting the reference date to coincide with the date of the initial public announcement appears more optimal than using the date when stock exchange(s) were required to be notified of the board‘s approval for delisting

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