Indian Takeover Legislation

There have been a lot of acquisitions of late that have involved one party in the nation of India, another somewhere else. For example, India's Reliance Industries in November offered to buy LyondellBasell Industries. Last month it sweetened that bid. Separately, Bharti Airtell has lately made a USD$9 billion offer for Zain Africa. This is its third attempt in two years to get an African presence.

Those are two instances in which Indian companies are the would-be buyer. But it stands to reason that Indian assets will come into the sights of outside corporations, as well. Accordingly, Sandeep Parekh, of the Indian Institute of Management, has offered us all a primer on Indian Takeover Regulation, which he calls "Under Reformed and Over Modified".

One paragraph from his abstract: "This paper argues that the complexity in the trigger points for disclosure and tender offer introduced over the years lacks a philosophy, and most of the amendments can not only be deleted but a very simple structure can be introduced making compliance of the regulations straight forward and easy to understand by management of listed companies. Certain other areas which need amendments have also been discussed. Chief amongst these are the provisions relating to consolidation of holdings, conditional tender offers, hostility to hostile acquisitions, definitional oddities, payment of control premium in the guise of non compete fees, treatment of differential voting rights, treatment of Global Depository Receipts and disclosure enhancements.

Indian Film Company: Dispute Resolved

A group of dissident investors led by hedge fund Altima Partners had been demanding the removal of two of the directors of The Indian Film Company (IFC).

The IFC, by the way, is an investment vehicle itself, not a production company. It invests in Indian movies, as you might imagine -- especially those it seems designed to appeal to Indians in the rest of the world, outside of India.

The IFC's public relations firm (which is headquartered in London) put out a statement this weekend -- neither in India nor in London is Super Bowl weekend sacred -- saying that the two sides have agreed to adjourn an extraordinary general meeting which had been scheduled for this Thursday, Feb. 5.

"The board is delighted to reach an agreement in the interests of the shareholders," said the flack.

It seems that the two controversial directors -- Raghav Bahl and Alok Verma -- will stay on. The board will get two new members, one of whom is associated with Altima and the other who isn't (Atul Setia and Deepak Gupta, respectively).

This is worth mentioning chiefly because the business model is intriguing: investing in movies that might appeal especially to a particular country's diaspora, if you will.

This just reinforces my determination to see Slumdog Millionaire. I wonder if they've got a piece of that one.