Religare Saga: Danny Gaekwad Makes Another Attempt At Regulatory Permissions To Make An Offer
Danny Gaekwad said his proposal gives a significant premium to the public shareholders of Religare, as compared to the offer made by the Burman family.
The US-based investor Danny Gaekwad has written letters to Securities and Exchange Board of India as well as the Reserve Bank of India, seeking exemptions to submit a bid against the Dabur fame Burman family for the majority stake in Religare Enterprises Ltd.
"Upon receipt of SEBI’s approval to make a public announcement for our proposed competing offer, we will establish escrow arrangements," the letter mentioned.
Gaekwad further mentioned that his proposal gives a significant premium to the public shareholders of Religare, and will be available to a larger number of public shareholders than that of the Burmans' open offer. He also requested the market regulator to consider the exceptional circumstances in this case.
Our financial resources are readily available, and we are prepared to establish the necessary escrow arrangements immediately upon SEBI’s approval.
The letter added that while concerned securities regulations stipulate a 15-day window for competing offers, the regulator should consider that the Burman offer presents a situation of legal complexities.
Gaekwad's letter also mentioned that it was disappointing to have his previous letter seeking SEBI's permission returned, despite his offer having the higher price.
Gaekwad also urged the RBI to give the required approvals to make the escrow arrangements that will have to me made if SEBI allows him to submit the bid.
Background
On Jan. 28, SEBI returned the US-based investor's letter, which sought permission to make the competing open offer. The regulator, however, found that the letter was not an exemption under the security law regulations.
Gaekwad’s offer speaks of a 17% premium over the Rs 235-a-share offer made by Burman family for a 26% stake in Religare. In addition to this, his offer is for a 55% stake in the company.
When Gaekwad’s offer surfaced, the Burman family had also released a media statement in its response. The statement mentioned that his offer was not a formal one, as he only sought permission from SEBI to be able to do so. The Burmans further mentioned that Gaekwad was already late in making the offer.
