SEBI Eyes Takeover Rule Changes: Acquired Firms May Soon Share Info

• SEBI is considering amending its takeover regulations to mandate acquired companies share key information with acquiring entities.
• Currently, acquiring companies must ensure accurate public announcements, but target companies are not obliged to cooperate or provide information for open offers.
• While most acquisitions proceed smoothly, issues arise when target companies refuse cooperation, hindering information access for the acquirer.
• An NBFC case highlighted this problem, where the target company failed to seek RBI approval, leading to SEBI intervention.
• Similar provisions requiring target company cooperation exist in takeover codes of other countries, like England.

Why It Matters: SEBI may soon require target companies to cooperate and share information during takeovers.