The market regulator, Securities and Exchange Board of India (SEBI) on 8 May 2014 exempted Abu Dhabi based Etihad Airways from making an open offer in the Jet deal. In its decision, the market regulator termed that purchase of 24% stake of Jet Airways by Etihad Airways doesn’t amount to a change in ownership in Jet Airways. Thus it doesn’t need to conduct a tender offer for shares in the domestic carrier.
The decision came after SEBI in February 2014 issued a show-cause notice to Etihad to this effect under the takeover code. SEBI has cleared the deal as the agreement between Jet and Etihad was modified and made compliant to the rules in existence. This was done to prevent an open offer as the control remains with Jet even after its stake acquisition by Etihad.
The decision was made as the existing promoters of Jet hold 51 percent shares and thus the effective control of the Airlines remained with the Indian nationals and the Jet board. The approval of SEBI has cleared the path for the Jet Airways and Etihad Airways to appoint key personnel to carry on the business as usual.
The Jet-Etihad deal is the biggest merger and acquisition deal in India’s aviation sector.
When: 8 May 2014
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