Mumbai, Feb 14 The Securities and Exchange Board of India (SEBI) on Friday rejected a request from US-based businessman Danny Gaekwad to make a competing offer for a majority stake in Religare Enterprises Limited.
Gaekwad had proposed an offer that was 17 per cent higher than the Rs 235-per-share bid made by the Burman family of Dabur for a 26 per cent stake in the company.
His offer aimed to acquire a 55 per cent stake in Religare. However, the Burman family, responding to Gaekwad’s bid, stated that his proposal was not formal as he had only sought SEBI's permission to make the offer.
They also pointed out that he was already late in entering the bidding process.
Earlier, on January 28, SEBI had returned Gaekwad’s letter seeking permission for a competing open offer, stating that it did not qualify as an exemption under securities law regulations.
Despite facing legal battles in the Delhi High Court and the Supreme Court, Gaekwad approached SEBI and the Reserve Bank of India again for approval.
The Supreme Court had even directed SEBI to expedite its decision.
SEBI's whole-time member, Ashwani Bhatia, in his latest order, once again rejected Gaekwad’s request.
"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.
He stated that allowing such an exemption would not be in the best interests of Religare’s shareholders.
Bhatia added that 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 stated.
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