News: Target companies to seek fair opinion from investment banks during M&A

C-Suite

Target companies to seek fair opinion from investment banks during M&A

In an endeavour to protect the interests of the minority shareholders of target companies in the event of merger and acquisitions, a panel constituted by the Securities Exchange Board of India (SEBI) has advised that such Indian companies must seek a second opinion to assess if the terms of the deal are in the fair interest of shareholders. This step is in tune with corporate governance practices followed by the American and European firms whereby the board of directors of the target company seeks the opinion of an independent investment bank who evaluates the bid and submits its recommendations to the shareholders enabling them to take a sound and informed decision. SEBI, in the past, has got numerous litigations from upset minority shareholders regarding a fairness opinion over the bid price. In case the suggestions given from the panel, which is headed by former Securities Appellate Tribunal C.Achuthan, are considered by SEBI, the grievances of shareholders in the event of a M&A.

In an endeavour to protect the interests of the minority shareholders of target companies in the event of merger and acquisitions, a panel constituted by the Securities Exchange Board of India (SEBI) has advised that such Indian companies must seek a second opinion to assess if the terms of the deal are in the fair interest of shareholders. This step is in tune with corporate governance practices followed by the American and European firms whereby the board of directors of the target company seeks the opinion of an independent investment bank who evaluates the bid and submits its recommendations to the shareholders enabling them to take a sound and informed decision. SEBI, in the past, has got numerous litigations from upset minority shareholders regarding a fairness opinion over the bid price. In case the suggestions given from the panel, which is headed by former Securities Appellate Tribunal C.Achuthan, are considered by SEBI, the grievances of shareholders in the event of a M&A.

Read full story

Topics: C-Suite, #MergersAndAcquisitions, #Updates

Did you find this story helpful?

Author

QUICK POLL

What is your top focus area for reinventing work in the hybrid world of work?

How can we prepare for a challenging 2023?

READ our latest issue for tips and suggestions.