SEBI Denies US Entrepreneur Gaekwad's Competing Offer for Religare Stake Acquisition
Click to start listening
Synopsis
On February 14, SEBI turned down Danny Gaekwad's request to present a competing offer for a majority stake in Religare Enterprises. His proposal, which was 17% above the Burman family's bid, failed to meet formal requirements and raise concerns about financial backing.
Key Takeaways
- SEBI rejected Gaekwad's competing offer for Religare.
- His bid was 17% higher than the current offer.
- Burman family claimed the proposal lacked formality.
- Gaekwad failed to demonstrate financial capability.
- SEBI stated it would not benefit Religare's shareholders.
Mumbai, Feb 14 (NationPress) The Securities and Exchange Board of India (SEBI) has declined a proposal from US businessman Danny Gaekwad to submit a competing offer for a majority stake in Religare Enterprises Limited.
Gaekwad's offer was 17 percent higher than the Rs 235-per-share bid from the Burman family of Dabur for a 26 percent stake in the firm.
He aimed to acquire a 55 percent stake in Religare. However, the Burman family remarked that Gaekwad's proposal lacked formality, as he only requested SEBI's approval to proceed.
They also noted that he had already missed the deadline to enter the bidding.
On January 28, SEBI had previously dismissed Gaekwad's request for permission for a competing open offer, indicating it did not meet the criteria for an exemption under securities law.
Despite ongoing legal challenges in the Delhi High Court and the Supreme Court, Gaekwad sought approval from SEBI and the Reserve Bank of India once more.
The Supreme Court had instructed SEBI to accelerate its decision-making process.
In the recent ruling by SEBI's whole-time member, Ashwani Bhatia, Gaekwad's request was denied again.
"While the proposed competing offer price suggested by the Applicant is Rs. 275 per equity share, which represents a premium of Rs. 40 over the Burman Group's offer, the Applicant has not proven his capacity to fulfill the financial obligations necessary for the competing offer," the order stated.
Bhatia emphasized that granting such an exemption would not be beneficial for Religare’s shareholders.
He also cautioned that a competing offer lacking financial backing could disrupt market conditions and undermine investor trust.
“Considering the above, I find it inappropriate to grant the exemptions requested by the Applicant,” he concluded.
