Danny Gaekwad, the US-based businessman who is exploring to pitch a competing bid against the Burman family for a stake in Religare Enterprises, has written to regulators Sebi and RBI seeking exemption from open offer regulations, Religare Enterprises informed stock exchanges on February 3.
"We hereby submit this application under Regulation 11(1) of SAST Regulations seeking exemption from strict enforcement of Regulation 20(1) and Regulation 20(5) of SAST Regulations with respect to our proposed competing offer," said a letter from Digvijay Gaekwad, shared by Religare.
Gakewad in his application has proposed that he is 'ready and willing to submit a genuine competing offer' for shares of REL at a price of Rs 275 per share. "We request you to kindly allow us to make a public announcement of our competing offer in the larger interest of the public shareholders of REL," said Gaekwad's letter.
Sebi's regulations stipulate a 15-day window for competing offers following the detailed public statement of the initial acquirer, i.e., the Burman Family. The investor said he is ready to establish an Escrow arrangement after Sebi's approval, and has also written to RBI, seeking necessary permission.
Gaekwad's company sought Sebi's permission to establish an escrow account with a scheduled commercial bank for the purposes of its competing open offer, where it will deposit cash up to Rs 60 crore. Subsequently, the company will seek permission to draw a bank guarantee in favour of its competing offer for Rs 540 crore.
Last week, Sebi had rejected Gaekwad's request to pick up a 26% stake in Religare Enterprises on procedural grounds. The Burman family in a statement said Gaekwad did not made any competing open offer and the group is going ahead with its own open offer, 'confident' of its successful closure.
"We are very disappointed that despite our genuine attempts to make a competing offer pursuant to January 23 and January 26 Letters, Sebi chose to return our requests, even though the price offered by us is substantially higher than Burmans' Open Offer price. We are committed to make a genuine competing offer which will offer substantially better terms to the public shareholders of REL," said the letter to Sebi.
On a YTD basis, shares of Religare Enterprises are down by nearly 14%.
"We reiterate our commitment to a swift and efficient execution of our competing offer. Our
financial resources are readily available, and we are prepared to establish the necessary escrow
arrangements immediately upon SEBI’s approval," said Gaekwad's letter to Sebi.
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