Religare Enterprises Faces Competing Acquisition Proposals
New Delhi: Religare Enterprises, an Indian financial services conglomerate, has received a proposal from U.S. businessman Digvijay "Danny" Gaekwad to acquire a 26% stake in the company. This development comes amid an ongoing battle for control of Religare, which saw the Burman family, founders of Dabur India, raise their stake to nearly 25% in September 2023.
Open Offer and Regulatory Scrutiny
The Burman family has launched an open offer to buy an additional 26% stake in Religare, starting on January 27th, 2023. However, Religare's independent directors have raised concerns about the offer price of 235 rupees per share, deeming it too low.
Gaekwad's Proposal
Gaekwad's firm has submitted a proposal to the Securities and Exchange Board of India (SEBI) to make a competing open offer for Religare at a price of 275 rupees per share, representing a 17% premium to the current offer.
Legal Challenges
The Burman family's bid for Religare has faced legal challenges. A minority shareholder has filed a petition in the Delhi High Court seeking to halt the open offer, alleging that the offer price is inadequate. The court has issued notices to the Burman family and SEBI, stating that any further actions will depend on the outcome of the lawsuit.
Market Dynamics
Religare's market value is approximately 81.83 billion rupees ($949.30 million). If successful in acquiring control, the Burmans would compete with other prominent Indian families in the financial services sector, such as Mukesh Ambani's Jio Financial Services and family-controlled Bajaj Finance.