When Can an Open Offer Be Withdrawn? SEBI Reg 23
When can an open offer be withdrawn? Almost never, and only on grounds written into the rule. Regulation 23(1) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011, read in the consolidation last amended on 5 December 2025 (read on 19 September 2026), opens with the words "An open offer for acquiring shares once made shall not be withdrawn except under any of the following circumstances" and then lists four. Three are events outside the acquirer's control, and the fourth needs a reasoned SEBI order that is published on SEBI's own website. A change of heart, or a share price that has moved the wrong way, is not on the list.
Definition
Withdrawal of an open offer
is the cancellation of an announced open offer, permitted only on the four grounds in Regulation 23(1) of SEBI's Takeover Code: a final refusal of a disclosed statutory approval, the death of a natural person acquirer, the failure of a disclosed agreement condition, or circumstances SEBI decides merit it. Source: SEBI (SAST) Regulations, 2011.
When can an open offer be withdrawn, ground by ground?
- A statutory approval is finally refused. Where an approval needed for the open offer, or for the acquisition that triggered it, has been finally refused, and the requirement for that approval was specifically disclosed in the detailed public statement and the letter of offer.
- The acquirer, being a natural person, has died.
- A disclosed condition in the acquisition agreement fails. The condition must not have been met for reasons outside the acquirer's reasonable control, the agreement must be rescinded, and the condition must have been specifically disclosed in the detailed public statement and the letter of offer. A proviso inserted with effect from 26 March 2013 blocks this route for an offer announced under Regulation 13(2)(g), even if the proposed preferential issue is not successful.
- Circumstances that in SEBI's opinion merit withdrawal. The explanation requires SEBI to pass a reasoned order permitting the withdrawal, and to host that order on its official website.
Two of the four turn on upfront disclosure. An acquirer who never disclosed the approval or the condition in the detailed public statement and the letter of offer cannot later rely on its failure.
Four grounds
Exhaustive list of circumstances in which an announced open offer may be withdrawn under SEBI's Takeover Code
Source: SEBI (SAST) Regulations, 2011, Regulation 23(1), consolidation amended to 5 December 2025, read 19 September 2026
What must the acquirer do on withdrawal?
Regulation 23(2) gives the acquirer two working days and routes everything through the manager to the open offer. In that window the acquirer must make an announcement in the same newspapers that carried the public announcement of the open offer, stating the grounds and reasons for withdrawal, and simultaneously inform in writing:
| Who | Why it matters to a reader |
|---|---|
| SEBI | The regulator sees the grounds as stated |
| Every stock exchange where the target is listed | The exchanges "shall forthwith disseminate such information to the public" |
| The target company, at its registered office | The board is told on the record |
The dissemination duty on the exchanges is what makes a withdrawal a filing you can read rather than a press report you have to trust.
How does withdrawal differ from an offer that simply fails?
A withdrawal ends the offer before shareholders tender. It is not the same as an offer that runs its course and attracts few acceptances, and it is not the same as an offer that never completes because a minimum acceptance condition was not met. The conditional route has its own rule, Regulation 19, which requires the underlying agreement to contain a term that the agreement stands rescinded if the desired level of acceptance is not received; see what a conditional open offer is.
It is also worth separating withdrawal from the rival-bid case. A competing offer does not cancel the first offer. Under Regulation 20(4) both become competing offers and both run to a common last tendering date, so an outbid acquirer that wants out still has to find a ground in Regulation 23(1).
Where does a withdrawal show up in the filings?
On the exchange record, twice over: the newspaper announcement is filed and the exchanges disseminate the written intimation. If the fourth ground was used, SEBI's reasoned order is on sebi.gov.in as well. The holding positions on either side of the episode are visible in each party's Regulation 29 SAST disclosures and in the company's next quarterly shareholding pattern, which is how you can check what an acquirer actually ended up holding rather than what it announced. For the offer itself, see what a SAST open offer is.
Flock reads these filings from the exchange record and keeps each one dated and linked to its source. Whether a withdrawn open offer changes your view of a company is your call to make. This is not investment advice.
Frequently asked questions
When can an open offer be withdrawn under SEBI rules?
Regulation 23(1) of the SEBI Takeover Regulations lists four grounds: a final refusal of a statutory approval that was disclosed upfront, the death of an acquirer who is a natural person, the failure of a disclosed condition in the acquisition agreement for reasons outside the acquirer's reasonable control where the agreement is rescinded, and circumstances that in SEBI's opinion merit withdrawal. Source: SEBI (SAST) Regulations, 2011, Regulation 23(1), consolidation amended to 5 December 2025.
Can an acquirer withdraw an open offer because the price moved?
No. A change of mind, a fall in the share price or a worse view of the target are not grounds in Regulation 23(1). The four listed grounds are exhaustive, and the fourth requires a reasoned order from SEBI permitting withdrawal. Source: SEBI (SAST) Regulations, 2011, Regulation 23(1).
What must an acquirer do after withdrawing an open offer?
Within two working days, and through the manager to the open offer, the acquirer must announce the withdrawal in the same newspapers that carried the public announcement, giving the grounds and reasons, and simultaneously inform SEBI, every stock exchange where the target is listed, and the target at its registered office. Source: SEBI (SAST) Regulations, 2011, Regulation 23(2).
Is a SEBI order permitting withdrawal made public?
Yes. The explanation to Regulation 23(1)(d) requires SEBI to pass a reasoned order permitting withdrawal and to host that order on its official website, so the fourth ground always leaves a public document. Source: SEBI (SAST) Regulations, 2011, Regulation 23(1), explanation.
Flock tracks these filings, sourced, dated, and linked back to the original. See what smart-money entities disclosed, without the guesswork about what it means.
Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.