No Means No: SEBI Junks Gaekwad's Competing Offer Request For Religare Yet Again
As per the order released by SEBI's whole-time member, Ashwani Bhatia, Gaekwad's request has been rejected once again.
Market regulator Securities and Exchange Board of India, on Friday, rejected the request of Danny Gaekwad, a US-based businessman, who wished to make a competing offer for the majority stake of Religare Enterprises Ltd.
Gaekwad’s offer spoke of a 17% premium over the Rs 235-a-share offer made by the Dabur fame Burman family for a 26% stake in Religare. In addition to this, his offer is for a 55% stake in the company.
However, when Gaekwad’s offer surfaced, the Burman family also released a media statement in its response. The statement mentioned that his offer is not a formal one as he has only sought permission from the SEBI to be able to do so. The Burmans further mentioned that Gaekwad is already late in making an offer.
Previously on Jan 28, SEBI had returned Gaekwad's letter, which sought permission to make a competing open offer for equity shares of Religare Enterprises Ltd. The regulator found that the letter was not an exemption under the security law regulations.
However, during a series of multiform disputes before the Delhi High Court and the Supreme Court of India, Gaekwad made another appeal before the market regulator and the Reserve Bank of India to get permissions for his competing offer. The apex court had also asked SEBI to expeditiously make a decision on this.
However, as per the order released by SEBI's whole-time member, Ashwani Bhatia, Gaekwad's request has been rejected once again.
"It is noted that although the price offered by Applicant in the proposed competing open offer is Rs. 275 per equity share, (a premium of Rs.40 per equity share over the offer made by the Burman Group), the Applicant has failed to demonstrate his ability to meet the financial obligation for making the competing open offer," the order read.
Bhatia even mentioned that giving an exemption to Gaekwad to make the competing offer will not be in favour of the shareholders.
"A competing offer, which is not backed by financial capability, would disrupt market dynamics and erode investor confidence. In view of the above, I do not deem it fit to grant the exemptions, as sought by the Applicant," he said.
