The committee has also clarified that the term "acquirer" shall exclude a company making an offer for buyback in terms of the Sebi buyback regulations. This means that any company which buys back shares will not be considered as an "acquirer", and thus will not trigger the takeover code. "Post-buyback, even if the threshold limit under the takeover code is breached, if there is no change in management control, the takeover code will not be triggered," said the takeover committee chairman justice PN Bhagwati.

Sebi legal executivedirector Dharmishta Raval said that if at any time a shareholder procured shares after getting to know of a buyback offer being made, then there would be no exemption for him if he breached the threshold limit. "Only if he remains absolutely passive will a general exemption be accorded to him," she said.

The committee has also recommended that a buyback and takeover offer can proceed simultaneously. But under no circumstances can an on-going buyback offer be called off if a takeover bid is launched on the company.

A revision in buyback offer terms, that is, a price change, can be made subject to the company receiving shareholder approval through a fresh special resolution.

Vice-versa, when a takeover offer is on, a company can proceed with a buyback offer, again subject to it having received shareholder approval through a special resolution.

This buyback offer will have to be made after the date of the public announcement of the takeover offer. When a takeover offer is on, the buyback offer will haveto take place within the same time frame.

"In case of a takeover offer, the target company can go for buyback of shares within the stipulated time period, and under the framework of Sebi buyback guidelines. The buyback offer can be made just as the takeover bid has been announced, and both the offers can take place simultaneously, but within the time frame," said Bhagwati.

The committee has clarified that buyback and takeover offers are mutually exclusive, and will be governed by their respective regulations. By this logic, a buyback offer, made when a takeover bid is in process, will not be considered as a competitive bid.

"Thus, if the buyback price is higher than the offer price in the takeover, still it will not be considered as a competitive bid," said Bhagwati.

The committee, which has concluded its deliberations, will take a month to come out with its draft report on the changes in the takeover code. This report will then be made available to the public for comments, and subsequently, taken upby the Board.