Burman family’s open offer to acquire an additional 26 per cent stake for Rs 2,116 crore in Rashmi Saluja-chaired Religare Enterprises is set to open on January 27. The family, via its four companies, including M B Finmart, Puran Associates, VIC Enterprises, and Milky Investment & Trading company will make an open market purchase to get the additional stake.
“Period expected to commence from Monday, January 27, 2025 and close on Friday, February 7, 2025,” said Religare in exchange filings.
The open offer to acquire an additional 26 per cent stake has long been a bone of contention between the Burman family and the Religare Enterprises as it will give away control of the financial company to the former. Apart from holding a majority stake and the voting rights, the family will also have the right to replace the current management of the firm.
“The prime objective of the acquirers (Burman family) for the acquisition of equity shares is to have substantial holding of equity shares, voting rights and acquisition of control of the target company,” said the financial company in a statement.
What is an open offer?
According to the securities and exchange board of India’s Regulation 3 (1) and Regulation 4, it is compulsory for an acquirer, be it a company or an individual, to make an open offer to the existing shareholders of the target company in two situations. The first case, which is also the situation for the Burman family, is if the acquirer wants to hold more than 25 per cent of the total shares or voting rights in the target company. Currently, the Burman family is the largest shareholder in the Religare Enterprises with a 25 per cent stake.
In the second scenario, if an acquirer holds more than 25 per cent but less than 75 per cent stake in the target company and wants to acquire an additional stake that is more than 5 per cent in the same financial year, Sebi makes it mandatory for the acquirer to give an open offer to existing shareholders.
The open offer gives existing minority shareholders an exit route ahead of any change in shareholding pattern or management of the target company instead of selling their shares in the secondary market.
Recently, in January this year, the global gaming and digital entertainment giant Nazara Technologies announced an open offer to sell an additional 26 per cent stake to Axana Estates and Plutus Wealth Management, together with Junomoneta Finsol for Rs 2,382 crore.
“Plutus Wealth Management LLP and Axana Estates LLP, along with PACs, will launch a public open offer to acquire an additional 26 per cent stake in Nazara,” said Nazara Technologies in an exchange filing.
Gautam Adani-led Adani Infra has planned to acquire a 30.07 per cent stake in Gujarat-based construction company PSP Projects for Rs 685 crore from its current promoter Prahaladbhai Patel.
“One of the promoters of the Company and Adani Infra (Acquirer) shall be acquiring up to 30.07 per cent equity share capital of the company,” said PSP Projects in a statement on November 19.
Following the stake acquisition, the Adani Group will make an open offer to public shareholders to acquire an additional 26 per cent stake, according to the company’s statement on the stock exchanges.
“As a result of the transaction, the acquirer will be required to make an open offer in accordance with Sebi (Substantial Acquisition of shares and Takeovers) Regulations, 2011,” the company added.
