what is creeping acquisition - Takeover Code
Creeping acquisition The Takeover Code of 1997 recognized creeping acquisition at two levels – from 15% to 55% and from 55% to the maximum permissible limit of 75%. Acquirers holding from 15% to 55% shares were allowed to purchase additional shares or voting rights of up to 5% per financial year without making a public announcement of an open offer. Acquirers holding from 55% to 75% shares were required to make such public announcement for any additional purchase of shares. However, in the latter case, up to 5% additional shares could be purchased without making a public announcement if the acquisition was made through open market purchase on stock exchanges or due to buyback of shares by the listed company. The Takeover Code of 2011 makes the position simpler. Now, any acquirer, holding more 25% or more but less than the maximum permissible limit, can purchase additional shares or voting rights of up to 5% every financial year, without requiring to make a public announcement for open offer. The Takeover Code of 2011 also lays down the manner of determination of the quantum of acquisition of such additional voting rights. This would be beneficial for the investors as well as the promoters, and more so for the latter, who can increase their shareholding in the company without necessarily purchasing shares from the stock market.
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