Although Sebi returned Gaekwad’s proposal on January 28, Rao’s entry might stir things up for Burmans
Burman family, the promoters of Dabur, is hit with another roadblock as it inches closer to acquiring an additional 26 % stake in Religare Enterprises. A Bangkok-based investor, who claims to own around 500 shares in the financial services company, has asked the Delhi High Court to hit a pause on the Burman family’s open offer on Tuesday, according to the Mint.
Instead, the investor, Sapna Govind Rao has requested the court to consider a counter bid made by the US-based businessman Digvijay ‘Danny’ Gaekwad. The US-based investor initially submitted a proposal to the securities and exchange board of India (Sebi) for a counter-offer to acquire a 26 % stake but later revised it and brought it up to 55 %. Gaekwad proposed to offer Rs 275 per share as compared to Burman family’s Rs 235 per share.
While Sebi returned Gaekwad’s proposal on January 28, Rao’s entry might stir things up for Burmans. She has urged the HC to consider minority shareholders’ interest and examine Gaekwad’s counter-offer, which offers 17 per cent premium on share.
“The letters submitted by Mr. Digvijay Laxmansinh Gaekwad are being returned since the same is not an exemption application in terms of Regulation 11 of SEBI (SAST) Regulations, 2011,” said Sebi in its letter. The letter was filed by Religare on the national stock exchange (NSE).
Gaekwad's proposal for the counter-offer already failed to comply with Sebi’s rules, that mandates a counter bid has to be made within 15 days of the public statement about an open offer by the original acquirer.
The same reason was cited by the Burman family when they criticised the late counter bid offer made by the US investor. In a statement the Burman family mentioned Gaekwad’s proposal lacks both substance and legitimacy.
“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 Burman Family’s spokesperson in a statement.