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IIMB Management Review

Document Type

Notes and Commentary

Abstract

A takeover generally involves the acquisition of a certain block of equity capital of a company which enables the acquirer to exercise control over the affairs of the company. In theory, the acquirer must buy more than 50 percent of the paid-up equity of the acquired company to enjoy complete control. In practice, however, effective control can be exercised with a smaller holding, usually between 10 and 40 percent, because the remaining shareholders, scattered and ill-organized, are not likely to challenge the control of the acquirer. Takeover mania appears to be sweeping the Indian corporate world. This has perhaps been induced by (a) the recent amendment to the Company’s Act which has made it nearly mandatory for a company’s board of directors to effect the transfer of shares to any buyer and (b) liberalization of investment policies pertaining to NRI funds.

Publication Date

12-1-1989

First Page

111

Last Page

116

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