India's Religare Faces Competing Offer for Stake: Danny Gaekwad Challenges Burman Family's Open Offer

Danny Gaekwad, a Florida-based businessman, has expressed his intent to make a competing cash offer for Religare Enterprises (REL) at Rs 275 per share, challenging the Burman family's open offer of Rs 235 per share. Gaekwad's offer comes as a surprise in the ongoing takeover saga of REL, which has seen the Burman family, promoters of FMCG giant Dabur, attempt to acquire an additional 26% stake in the financial services company.

Gaekwad's offer, made through his company Danny Gaekwad Developments & Investments Florida, is for 26% of the outstanding share capital of REL. In a letter to the Securities and Exchange Board of India (SEBI) Chairperson, Gaekwad contended that his offer price of Rs 275 per share provides a fair and reasonable exit opportunity for public shareholders, in compliance with the letter and spirit of the SEBI Takeover Regulations.



Gaekwad's letter also contended that the Burmans' open offer grossly undervalues the real worth of REL, is to the detriment of public shareholders, and fails to disclose how they propose to comply with the Reserve Bank of India (RBI)-mandated condition on the consolidation of non-banking financial companies (NBFCs) within the Religare and Burman groups and the impact thereof on REL shareholders.

The Burman family's open offer, which is set to begin on January 27, 2025, has faced opposition from REL's independent directors, who have raised concerns about the valuation of the open offer and the potential fraud and other breaches by Burman family entities. The independent directors have advised public shareholders to carefully evaluate their options, considering the pricing issues and the regulatory challenges.

The competition watchdog, the Competition Commission of India (CCI), has approved the Burman family's acquisition of a 5.27% stake in REL, as well as the subsequent open offer for an additional 26% stake. However, Gaekwad's competing offer may delay or even prevent the Burman family's open offer from proceeding, as shareholders may wait for Gaekwad's offer or prefer it over the Burman family's offer.

The outcome of this competing offer will be closely monitored by market participants and regulators alike, as the Burman family's attempt to acquire a majority stake in REL continues to unfold. Shareholders will need to weigh the pricing, transparency, and regulatory compliance aspects of both offers before making their decisions.