Florida-based entrepreneur Danny Gaekwad has reached out to the Board of Religare Enterprises Ltd (REL) expressing his intention to launch a rival offer to the Burman Group’s open offer, which commenced on Monday.
The communication, received by REL on Monday, comes after Gaekwad’s appeal to the SEBI Chairperson on Sunday for permission to waive certain statutory timelines under the Takeover Code. This waiver would enable him to present a competing offer to acquire a controlling 55% stake in REL.
Described as a “serious player,” Gaekwad’s letter to the REL Board reiterated the key points from his previous communication to the SEBI Chief. It also indicated his readiness to enlist a merchant banker and establish an escrow account as required by the Takeover Code, according to sources familiar with the matter. The letter underscored a specific provision (Regulation 11(1) of SAST) granting SEBI the authority to grant exemptions on statutory timelines in the interest of public shareholders.
Furthermore, Gaekwad’s letter pointed out that the Burman Group’s final letter of offer did not address the conditions set by the Reserve Bank of India in its approval, potentially posing a risk to the interests of REL’s public shareholders if the Burman Group’s open offer proceeds without a competing offer.
In an interview with a TV channel on Monday, Gaekwad described himself as a “value buyer” and expressed his belief that REL shares remain undervalued in the stock market.
Regarding Gaekwad’s proposed offer price of ₹275 per share, sources suggest that it validates the independent directors’ concerns that the Burman Group’s offer of ₹235 per share was undervalued.
While opinions among securities market experts and proxy advisors are divided on Gaekwad’s competing offer attempt, some argue that SEBI should not grant exemptions from the established statutory timelines in this case. They view this situation as a significant test for SEBI, particularly considering the need to strengthen US-India relations following Trump’s re-election and India’s desire to attract foreign direct investment from the US.
Amit Tandon, Founder and Managing Director of Institutional Investor Advisory Services (IIAS), emphasized the importance of regulators ensuring compliance with mandated timelines to uphold investor trust and process integrity. Similarly, Shriram Subramanian, Founder & MD of InGovern Research, criticized Gaekwad’s competing offer as lacking credibility and authenticity, raising concerns about the entity’s background, funding sources, and ultimate ownership.
Subramanian outlined several grounds on which SEBI could reject the Gaekwad entity’s offer, emphasizing the importance of adhering to procedural requirements and timelines to maintain the integrity of the capital markets and regulatory framework.
