Mumbai: Sebi has exempted Tata Sons, the promoter group of Trent Ltd, from making an open offer to acquire additional shares in the retailer, saying that the transaction would not result in any change of management control or affect public shareholders.
Tata Sons, promoter of Trent Ltd for several decades, has proposed to acquire another 14.44 lakh shares in the company through preferential allotment which could take its overall shareholding to 26.86 percent. Currently, Tata Sons has 23.08 percent stake in the retailer.
In its order dated October 25, Sebi said it was granting, "exemption to the Acquirer, Tata Sons Ltd from complying with the requirements of Regulation... Thereof in respect of its proposed acquisition of 14,44,600 equity shares of the target company, Trent Ltd".
The regulator said that the acquirer is in the control of Trent and the proposed acquisition would not result in any change in control of the management of the latter.
"It is seen that the acquirer was having more than 25 percent shareholding prior to the said Qualified Institutional Placement (QIP) and the dilution in its shareholding occurred due to further issuance of capital by the target company (Trent) and not due to sale of the shares by the acquirer," the order said.
Prior to the QIP on March 15 this year, Tata Sons held 25.66 percent in Trent. After the same, the stake was diluted to 23.08 percent.
Out of the total 16,67,000 shares, 14,44,600 equity shares would be issued to Tata Sons along with its subsidiaries -- Ewart Investments Ltd and Panatone Finvest Ltd. The remaining 2,22,400 shares would be allotted to Tata Investments Corp Ltd.
"After the proposed issue, the shareholding of the acquirer, individually, would increase from 23.08 percent to 26.86 percent and shareholding of the promoter group, collectively, would increase from 28.60 percent to 32.89 percent," Sebi said.
The application seeking exemption was referred to an expert panel, which did not find any convincing reason for insisting Tata Sons to make an open offer.
Tata Sons had submitted its shareholding along with the promoter group is already in excess of 25 percent.
Accordingly, the acquisition of additional 4.29 percent equity shares of the target company by the acquirer and the promoter group pursuant to the proposed issue would not breach 'creeping acquisition' limit of five percent under takeover norms, it had said.