Requiem for shareholders? the acc takeover an`d the issues in perspective

Abstract

The acquisition of a large block of shares owned by the Tata group in the cement giant. The Associated Cement Companies Limited (ACC) by the Gujarat Ambuja Cement group (GACL) in December 1999 has kicked up a major controversy. This is on account of the view taken by GACL and confirmed by the Securities and Exchange Board of India (SEBI) that the acquisition does not attract the public offer provisions of SEBI's Takeover Regulations. Consequently ACC's public shareholders have been left with no exit route. The paper argues that the Takeover Regulations and SEBI's decision in the instant case are flawed and anti-investor. The paper goes on to examine the role of the ACC Board and the financial institutions in the need to protect investor interests, and offers some suggestions for legislative changes.