New Delhi, May 22 (PTI): The finance ministry is likely to fix the open offer limit at 50-75 per cent to bring down the cost of acquisition against 100 per cent recommended by the Sebi panel in the new takeover code.
With regard to the 100-per cent open offer (as recommended by the Achuthan panel), more or less it would be between 50 per cent and 75 per cent, an official said.
The Sebi panel headed by C. Achuthan on the new takeover code had suggested that buyers should make a 100 per cent open offer, giving an exit option to all the shareholders of the target company.
At present, the norms mandate the acquirer to make an open offer of 20 per cent.
The ministry is expected to shortly finalise its view on the takeover report.
The recommendation of 100 per cent open offer was opposed by the industry as it would have made the acquisitions very expensive.
The ministry, however, is likely to agree on raising the trigger point for an offer to 25 per cent from the current 15 per cent, in line with the panels suggestion.
This (trigger point) is the only consensus we have. Most of the participants in a meeting with chief economic adviser Kaushik Basu had said 25 per cent would be good enough, he said, adding, we will have one more wrap meeting on the code.
The official, however, said though there was consensus on the trigger point, more discussions would take place.
The meeting to be chaired by department of economic affairs secretary R. Gopalan is expected shortly.
According to the takeover guidelines proposed by the Sebi panel in July last year, an entity buying 25 per cent stake in a company will need to make an open offer to the rest of the shareholders.