Sebi now says that if the stock price of the target company goes up because of leaked news or media reports, these disruptions will not be counted when calculating the open offer price.
This aims to ensure the price is not artificially inflated by rumors or leaks.
Starting June 1, 2024, the top 100 listed companies must quickly respond to any media reports that significantly affect their stock prices.
They must confirm, deny, or clarify the information within 24 hours.
This rule will be extended to the top 250 listed companies from December 1, 2024.
Sebi proposes using the "unaffected price," which means the stock price before any rumors or leaks, to determine the open offer price.
This helps in keeping the acquisition costs fair and unaffected by speculative trading.
Sebi’s new rules are designed to prevent the costs of mergers and acquisitions from being unfairly inflated by leaks and rumors.
By excluding price disruptions caused by such leaks and requiring companies to quickly clarify rumors, Sebi aims to make the M&A process fairer and more predictable.