A useful comparison

Dear Editor,

I wish to draw your attention to some key points that arise during a comparative analysis of the takeover laws of India and the UK. This will be of interest to readers who see takeovers as a matter of great potential, especially given the increasing trade and investment between the two countries.

The first point that deserves attention is the different interpretations in the two jurisdictions of the term “persons acting in concert” (PAC). What constitutes PAC is wider in India than in the UK on account of the expression “common objective”, which is exclusive to Indian legislation.

The second point is to do with the threshold limit for a mandatory open offer, which in India is 25% and in the UK is set at 30%. As such, it is easier to hold a dominant position in matters requiring extraordinary resolutions in England. So far as creeping acquisitions are concerned, India’s Takeover Code, the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, obligates a person to make a public offer in most cases, while allowing for an acquisition of 5% in a financial year without triggering the mandatory offer obligation. In contrast, in the UK there are no regulations for creeping acquisitions.