Wednesday, 27 May 2020


The term ‘Competing Offer’ refers to an offer given by any other person (Competing Acquirer) after an offer has already been given by an Acquirer to the shareholders of the Target Company to acquire the shares held by them.  The Takeover Regulations permits all persons other than the original acquirer to make a competing offer and does not restrict even the Person Acting in Concert (PAC)  of the acquirer from making a competing offer.
Legal Provision
Regulation 20 of Takeover Regulations governs and deals with the concept of Competing Offer.
Size of Competing Offers
Competing offer shall be for such number of shares which, when taken together with shares held by the acquirer and the PAC, shall be at least equal to the aggregate holding of the acquirer who has made the first public announcement including the shares proposed to be acquired by such acquirer under the offer and thee agreement that has triggered the first open offer.
 In case of a competing offer, the subsisting mandatory offer’s size can be increased up to 1 working day prior to the commencement of the tendering period.
 In case of a competing offer, the subsisting voluntary offer’s size can be increased within a period of fifteen working days from the public announcement of a competing offer.
Timing of the Competing offer

Competing offer can be made within 15 working days from the date of Detailed Public Statement made by the acquirer who makes the first Public Announcement.

No person shall be entitled to make a public announcement of an open offer for acquiring shares, or enter into any transaction that would attract the obligation to make a public announcement of an open offer for acquiring shares under the Takeover regulations, after the period of fifteen working days from the date of first public announcement and until the expiry of the offer period for such open offer.
Number of Competing Offer
The Takeover Regulations does not impose any restriction on the number of competing offers provided all the offers are made within the timeframe prescribed.
Conditional Offer
Competing offer can be conditional as to the minimum level of acceptances only if the original open offer conditional as to the minimum level of acceptances.
Competing offer does not constitute as Voluntary Offer
Though a competing offer under the Takeover Regulations is made by the acquirer voluntarily, a competing offer shall not constitute voluntary offer under the Takeover Regulations. Therefore, the conditions applicable to a voluntary offer under the Takeover Regulation shall not be applicable to a competing offer.
Revision of offer
Acquirers who have made the first public announcement, as well as competing acquirers, shall be allowed to revise the terms of their offers as long as these revisions are favourable to the target shareholders.
Induction of new director
No induction of any new director to the board of directors of the target company during the pendency of competing offers, provided that in the event of death or incapacitation of any director, the vacancy arising therefrom may be filled by any person subject to approval of such appointment by shareholders of the target company by way of a postal ballot.
Prohibitions on Competing Offers in Certain Cases
In view of Takeover Regulation 20 (7), making a following competing offer, or entering into a transaction which would trigger an obligation to make a following competing offer is not permitted, until after the expiry of the offer period, in the following cases:
1.      where the original open offer is for the acquisition of shares pursuant to a disinvestment in terms of Regulation 13(2) (d); or
2.      where the open offer is pursuant to a relaxation granted by the SEBI pursuant to Regulation 11(2) from strict compliance with the various open offer obligations set out in Chapters III and IV under Regulation 11(2), SEBI may grant such a relaxation where the Central Government or a State Government or any regulatory authority has superseded and replaced the board of the target company or where it is otherwise satisfied that such a relaxation will be in the interests of the public, investors and the securities market.
Person Restricted from making competing offer
No person who is a fugitive economic offender can make a competing offer for acquiring any shares or voting rights or control of a target company.
The Takeover Regulations do not regulate or impose any restrictions on the target company from soliciting competitive bids from other potential bidders. The Regulations have been designed in such a manner which provides equal opportunity to all the shareholders to choose either to remain with the new promoter or to exit. Competing offers have a special feature of providing public shareholders an opportunity for accepting more favourable price as well as an opportunity to determine the controlling shareholders of the target company.
This Article has been Compiled by Swati Garg (Senior Associate)
You can direct your queries or comments to the author at

The contents of this article should not be construed as legal opinion. This article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. We expressly disclaim any financial or other responsibility arising due to any action taken by any person on the basis of this article.

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