Sebi exempts 3 trusts from making open offer to Taj GVK Hotels shareholders

Markets regulator Sebi on Wednesday exempted three trusts from making an open offer to the shareholders of Taj GVK Hotels and Resorts Ltd after their proposed acquisition of a 49.44% stake

Markets regulator Sebi on Wednesday exempted three trusts from making an open offer to the shareholders of Taj GVK Hotels and Resorts Ltd after their proposed acquisition of a 49.44 percent stake in the company.

The order came after three trusts -- Blue Moon Trust, Moonshot Trust, and Starlight Trust-- filed an application with the regulator in April 2023, and sought exemption from certain provisions of takeover regulations.

The acquirer trusts have been set up as private family trusts for providing suitable succession planning between the members of the Gunupati Indira Krishna Reddy family.

Under the proposed acquisition, Gunupati Indira Krishna Reddy, who is a promoter of Taj GVK Hotels, intends to transfer a total of 49.44 percent of her shareholding in the firm to the three trusts, according to a Sebi order.

Once the transaction is complete, the acquirer trusts would collectively hold 49.44 per cent shares in Taj GVK Hotels.

The proposed transaction triggers the open offer requirement under the takeover regulations and accordingly, the trusts sought exemption from the rule.

Under the regulations, entities acquiring 25 percent or more stake in a listed company have to make an open offer to the company's shareholders.

Granting an exemption from the open offer, Sebi noted that the proposed transaction is aimed at streamlining the succession and welfare of the Gunupati Indira Krishna Reddy family.

Also, it noted that the proposed transaction would neither result in any increase or decrease in the shareholding of the promoter group nor would result in a change in the control and management of the target company.

Accordingly, Sebi has granted "exemption to the proposed acquirers, viz. Blue Moon Trust, Moonshot Trust, and Starlight Trust from complying with the requirements of... the Takeover Regulations, 2011 with respect to the proposed direct acquisition in the Target Company, viz. Taj GVK Hotels And Resorts Ltd, by way of the proposed transaction".

Further, Sebi said the exemption granted is limited to the requirements of making an open offer under the Takeover Regulations, 2011, and will not be construed as an exemption from the disclosure requirements.