Open Offers And Guarded Gates: Rethinking Hostile Takeovers Under The Sebi Takeover Code In India - Are We Welcoming Competition Or Locking The Doors On Hostile M&A?

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Harshita Kaul, B.A., LL.B. (Hons.), Amity Law School, Amity University Kolkata

ABSTRACT

Hostile takeovers, commonly a contentious part of corporate acquisitions, occurs when an acquiring company attempts to acquire control of a target company without the approval of its board of directors. They are often linked with aggressive market strategies and a significant legal and strategic manoeuvring. In India, the legal framework relating to such acquisitions is mainly encapsulated in the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, popularly known as the SEBI Takeover Code. This regulation embodies a structured legal framework aimed at ensuring transparency, safeguarding the shareholders rights, and ensuring orderly conduct in the market. But unlike in other jurisdictions like the United States, where firms can resort to a wide range of defensive measures like poison pills, staggered boards, and White Knight Strategy to fend off hostile offers, Indian corporate law substantially constrains the defensive options that target firms have. This article explores the distinctive legal, regulatory, and strategic environment for hostile takeovers in India. It explores the ground realities of the SEBI Takeover Code and how its rules impact the acquirer as well as the target company, specifically in the scenario of hostile takeover bids. The article focuses in particular on the high-profile Adani-NDTV takeover as a case study to detail how hostile takeovers are executed under Indian law and how regulatory limitations influence the dynamics of these deals. From a comparative perspective, the paper analyses the effectiveness of India's existing regulatory framework and determines the lacunae that can vitiate the balance between safeguarding shareholder interests and fostering a healthy mergers and acquisitions (M&A) environment. Lastly, the article suggests legal reforms to update India's takeover regime, provide fair play, and strengthen investor confidence.

Keywords: Hostile Takeover, SEBI Takeover Code, Mergers & Acquisitions, Defensive measures, Shareholders Rights, Corporate Ownership, Adani-NDTV Takeover

OPEN OFFERS AND GUARDED GATES- RETHINKING HOSTILE TAKEOVERS UNDER THE SEBI TAKEOVER CODE I.

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