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Religare: US-based D Gaekwad Developments makes competing offer

New Delhi: A day ahead of an open offer, Religare Enterprises Ltd (REL) on Sunday said its US-based investor Danny Gaekwad Developments & Investments has proposed to pick up a 26 per cent stake in the financial services firm at a higher price than offered by entities promoted by the Burman family.

In a letter written to the Sebi Chairperson, posted by REL, Danny Gaekwad Developments & Investments has requested the regulator to permit the US-based entity to submit a competing open offer. However, the Burman group in a statement said Gaekwad has not made any competing open offer and the group is going ahead with its own open offer and is “confident” of its successful closure.

“The Request for Permission is entirely lacking in substance, bona fides, and offers no indication of any source of funds or even the capacity to purchase the proposed shares,” a Burman Group spokesperson said.

Digvijay Laxmansinh Gaekwad, who claimed to be a globally recognised investor, has offered to pay a 17 per cent higher price of Rs 275 per share of REL as against the open offer price bid of Rs 235 per equity.

Burmans’ Religare Enterprises’ open offer to acquire an additional 26 per cent stake from the open market would commence on January 27 following the regulatory approvals.

The open offer is for the acquisition of up to 9,00,42,541 fully paid-up equity shares of face value of Rs 10 each, representing 26 per cent of the expanded voting share capital of REL from the public shareholders. Burman Group entities include Finmart Private Ltd, Puran Associates Private Ltd, VIC Enterprises Private Ltd, and Milky Investment & Trading Company. Following the open offer, Burman’s stake in REL would rise to 53.94 per cent, while Digvijay Laxmansinh Gaekwad proposes to pick 55 per cent stake in the company.

According to Burman Group, in his correspondence, Gaekwad has only made a request to SEBI seeking permission to make a competing open offer. “In his correspondence, he has only made a Request for Permission to SEBI seeking their permission to make a competing open offer. Gaekwad had to make the competing offer, if at all, within 15 days from the date of public statement, which was made by the Burman Group on October 4, 2023 but he did not do so. Over 400 days have now elapsed for entitling anyone to make a valid competing open offer,” said the Burman Group spokesperson

The spokesperson further added that Regulation 20(5) of the SAST Regulations bars any competing offer after this period. “So, the question of seeking permission from SEBI itself does not arise,” the spokesperson said.

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