By Aditya Kalra
NEW DELHI (Reuters) – India’s Religare Enterprises (NSE:RELG) said a U.S. businessman has made a proposal to acquire a 26% stake in it, the latest twist in the battle for control of the financial services company which has rejected another bid as being priced too low.
The Indian billionaire Burman family, which has founded and controls consumer goods conglomerate Dabur India (NSE:DABU), raised its stake in Religare to nearly 25% in September 2023, triggering a so-called open offer to buy more shares.
Through the open offer process, which starts on Jan. 27, the Burmans plan to buy around 26% more of Religare to bolster their presence in India’s rapidly growing financial services sector, but Religare’s independent directors flagged this week the offer price of 235 rupees per share was too low.
In a stock exchange disclosure late on Friday, Religare shared a letter from U.S. entrepreneur Digvijay “Danny” Gaekwad’s firm requesting permission from Indian market regulator SEBI to make an open offer of 275 rupees per share for the Indian company, a 17% premium to the current offer.
A representative of the Burman family, Mohit Burman, and the market regulator SEBI did not immediately respond to requests for comment on Saturday. Florida-based Gaekwad did not immediately respond to a Reuters’ email seeking comment outside of normal U.S. business hours.
Religare shares closed at 249.40 rupees on Friday, giving it a market value of 81.83 billion rupees ($949.30 million).
The Burmans, if they win control of Religare, will find themselves pitted against other Indian billionaire families in the financial services business, including Mukesh Ambani’s Jio Financial Services and family-controlled Bajaj Finance (NSE:BJFN).
But the Burmans’ Religare bid has faced regulatory and legal challenges.
Earlier this week, Religare disclosed that a minority shareholder had approached the Delhi High Court, and was seeking to stop Burmans’ open offer bid.
Legal papers show that the shareholder holds 500 shares in Religare, and the court on Tuesday issued a notice to Burmans and SEBI and said any subsequent action – such as an open offer – “shall be subject to the outcome” of the lawsuit.
($1 = 86.2000 Indian rupees)