(5) Asset Alienation: TRAC has recommended that acquirers be permitted to declare their intention to alienate "material assets" of the target, (233) which may enhance their ability to raise finances for hostile acquisitions. (6) Defensive Measures: Perhaps TRAC's most significant recommendation is its recommendation to explicitly inhibit the target board's ability to pursue defensive tactics.
and Sterlite Industry of Hindalco Industries, Ltd., (11) Kohinoor Foods Ltd.'s fears that a Temptation Foods Ltd.-led consortium was attempting a covert hostile acquisition, (12) the Dalmia Group's interest in Gesco Corp., (13) Jagajit Jaiswal's bid for Jagatjit Industries, Ltd.
It examines two latent hostile acquisition defenses inherent in the structuring of Indian corporations--one based on Press Note 2 (2009) and the other on the size of the investment that the hostile acquirer proposes to make.
BARRIERS TO HOSTILE ACQUISITION: ARE THEY INSURMOUNTABLE?
With respect to the steps required to consummate a hostile acquisition in India, the Indian regulatory landscape can be understood from two perspectives.
(52) Alternatively, if a general meeting is fast approaching, the hostile acquirer can take this step first, and seek to gain proxy access to set the hostile acquisition in motion.
Moreover, taking into account the historical likelihood of domestic institutional investors ("DII") voting with promoters, if domestic institutional investors stakes are counted with promoter stakes, the study found that fifty-seven companies, representing 28.5% of the sample set, are vulnerable to hostile acquisition. Tables 1 and 2 present the conclusions of the study conducted, identifying those companies from the sample set where the promoter holding was under 50% (Table 2), and companies from the sample set where the combined promoter and domestic institutional investor holding was less than 50% (Table 1).
However, at least three latent defense mechanisms additionally inhibit the hostile acquisition route in India.
When this data is consolidated with tire data in Table l, one finds that a total of 86 of 200 companies, representing 43% of the sample set, are vulnerable to foreign (inbound) hostile acquisition.
Of course, the hostile acquirer can make a hostile acquisition in India despite this provision.
In this manner, nationalist sentiment forms an invisible barrier to the hostile acquisition under the approval route.