Loading Now

Takeover tussle intensifies: Florida investor Danny Gaekwad ups the ante with 55% stake bid for Religare

Takeover tussle intensifies: Florida investor Danny Gaekwad ups the ante with 55% stake bid for Religare


Florida-based businessman Danny Gaekwad announced on Sunday that, if permitted by SEBI, he would be willing to acquire a controlling stake in Religare Enterprises Ltd (REL) by launching a competing open offer for 55 per cent of the company’s outstanding share capital. This marks a significant shift from his earlier Friday communication, which indicated his readiness to go in for a competing open offer size of 26 per cent. 

This significant announcement came a day before the Dabur-owner Burman Group’s open offer for additional 26 per cent stake in REL opens on Monday (January 27).

In a new letter — described by Gaekwad as an addendum to the Friday letter—addressed to SEBI Chairman on Sunday, Gaekwad clarified that the competing open offer from his side (Danny Gaekwad Developments &Investments Florida) will be for 55 per cent of the outstanding equity share capital of REL. 

This revision to the offer size has been prompted by the need to comply with the regulatory requirements stipulated in Regulation 20(2) of the SAST Regulations. 

This regulation governs the size of competing offers. It stipulates that a competing offer must be for such number of shares that would result in the competing acquirer, along with persons acting in concert, holding a shareholding per centage at least equal to that of the original acquirer (who triggered the first open offer). 

In this case, post the successful Burman Group’s open offer, the four acquirer entities will in aggregate hold about 54 per cent of REL. So Gaekwad is willing to make a competing open offer for 55 per cent  to comply with SAST regulations. 

BURMANS’ HIT BACK

Even as Gaekwad expressed his willingness to peg the open offer size of 55 per cent, the Burman Group —which as an original acquirer had triggered the open offer —on Sunday outrightly rejected Gaekwad’s letter, noting that it lacked substance, bonafides and had no indication on source of funds. 

In a strong rebuttal to claims made by the US-based investor Digvijay L Gaekwad on making an open offer for REL, the Burman Group spokesperson said that Gaekwad has not made a competing open offer but only sought SEBI’s permission to do so, which is barred under Regulation 20(5) of the SAST Regulations due to the lapse of over 400 days since the Burman Group’s public statement on October 4, 2023. 

He emphasised that the request lacks substance, bona fides, and any indication of financial capacity to purchase the proposed shares while stressing that REL’s leadership is recklessly disseminating this baseless claim to mislead public shareholders and reiterated its commitment to proceeding confidently with their open offer.

“Digvijay L Gaekwad has not made any 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. 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,”  he added. 

“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. The fact that this purported letter, lacking any bona-fides has been disseminated by REL to the stock exchanges, without undertaking any diligence, reeks of connivance, deceit and gross recklessness amongst the executive leadership at REL. It is clearly done with the aim of misleading the public shareholders of REL on whether to participate in the open offer. We are going ahead with the Open Offer and are confident of its successful closure,” the spokesperson said. 

Four entities controlled by the Burman Group have made an open offer for acquisition of up to 9,00,42,541 fully paid-up equity shares of face value representing 26 per cent of the Expanded Voting Share Capital of REL (target company), from the company’s public shareholders.





Source link

Post Comment