In a recent informal guidance dated July 23, 2018, issued by Securities Exchange Board of India (“SEBI”) the issue that was considered was whether conversion of a promoter company of a listed company (“Target Company”) from a private limited company to a limited liability partnership (“LLP”) can trigger open offer obligations under the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 (“Takeover Regulations”). In this case the promoter company held 18.19% of the Target Company. Pursuant to the conversion of the promoter company into an LLP, the shares held by the promoter company will be held by the LLP. SEBI observed that this would fall within the meaning of ‘succession’ under regulation 10(1)(g) of the Takeover Regulations and hence would be exempted from the obligation of making an open offer.
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