The overall worth of open offers for public shareholders hit a one-year high of Rs 12,549 crore in June, almost entirely on account of a mega offer by global liquor giant Diageo Plc to acquire stake in United Spirits.
As per Sebi's latest monthly report, the market regulator approved a total of 8 open offers for shares worth Rs 12,549 crore in June, 2014. This is the highest value for open offers made for a month after Rs 29,242 crore recorded in June, 2013.
With the latest June figures, the cumulative size of open offers to public shareholders has touched Rs 12,851 crore for the first quarter of the current fiscal.
Listed companies had made offers worth a mere Rs 48 crore in April and Rs 254 crore in May, this fiscal.
It was Diageo's open offer worth about Rs 11,449 crore that almost entirely contributed to the record figure for the month of June. The offer opened on June 6 and closed on June 19. It was the only offer made towards consolidation of holding during the month.
Besides, a total of six offers worth Rs 1,098 crore were meant for change in control of management, while one offer valued at Rs 2 crore was made with the objective of substantial acquisition in June.
Open offers are made by the company promoters and other entities for either consolidation of their holdings, as part of substantial acquisition or change in control of management in publicly listed companies.
The Securities and Exchange Board of India (Sebi) rules require a mandatory open offer for minority shareholders in the event of any major change in the promoter holding of a listed company, including in the wake of any direct or indirect acquisition of 25 per cent.
Such open offers are required for acquisition of up to 26 per cent stake from public shareholders.
As part of the deal to buy 53.4 per cent stake in Vijay Mallya-led UB group's United Spirits, Diageo had made a Rs 11,448.91 crore open offer for purchase of 26 per cent stake in the company from non-promoter shareholders.
The offer for 3,77,85,214 United Spirits shares, was made through Relay BV, a wholly owned indirect subsidiary of Diageo.