US investor to seek banker as Sebi ‘returns’ its Religare offer

MUMBAI: Florida-based investor Digvijay Laxmansinh Gaekwad, who has proven curiosity in buying Religare Enterprises, will want to appoint a service provider banker to adjust to Sebi‘s takeover guidelines. After that, he’ll seek the regulator’s approval to make an offer for the New Delhi-based monetary companies firm.
This comes after Sebi on Tuesday “returned” Gaekwad’s letter requesting permission to submit a competing offer to purchase 55% of Religare. In a inventory change disclosure, Religare shared Sebi’s letter that mentioned Gaekwad’s letter is being returned “since the same is not an exemption application in terms of regulation 11” of the takeover code. Regulation 11 empowers Sebi to grant exemptions to an acquirer from strict compliance with sure provisions of the open offer course of.
The Burmans of Dabur are the biggest shareholders of Religare, holding a 25% stake, and so they have made an open offer to purchase an extra 26% stake from the corporate’s public shareholders. The Burmans’ offer, which opened on Jan 27, will shut on Feb 7.
Sources have indicated that Gaekwad will want to open an escrow account and deposit a proportion of the whole dimension of the open offer earlier than issuing an in depth public assertion. Approval from RBI is required for a overseas investor to open an escrow account.
Gaekwad has supplied Rs 275 for a share of Religare, which is a 17% premium to Burmans’ offer of Rs 235 apiece. On Tuesday, the Religare inventory ended at Rs 243 on the BSE. Gaekwad, who was born in India and moved to the US in 1987, has diversified pursuits spanning cloud companies, actual property, and accommodations. Religare is Gaekwad’s first try to bid for an Indian monetary companies firm.
Sebi guidelines mandate the appointment of a service provider banker to handle the open offer course of.
However, Sebi’s response signifies that Gaekwad’s letter didn’t meet the applying standards outlined underneath its takeover guidelines. Last week, Religare disclosed {that a} minority shareholder had approached the Delhi excessive court docket, looking for to cease Burmans’ open offer. The shareholder owns 500 shares of Religare. The court docket then issued a discover to Burmans and Sebi stating that the open offer “shall be subject to the outcome” of the lawsuit.