This comes after his initial counteroffer to the Burman’s family’s open offer for Religare—first submitted on 24 January and revised on 26 January—was returned by the Securities and Exchange Board of India (Sebi) last week. In Sebi’s view, Gaekwad’s offer did not conform to the regulator’s exemption application rules under the takeover code.
Gaekwad’s latest letter to Sebi seeking the special exemption, dated 1 February, was shared by Religare with the exchanges on Monday.
Gaekwad’s attempts gain significance in light of Religare’s upcoming AGM on Friday, 7 February. Three proxy advisory firms, who advise institutional investors on how to vote on shareholder resolutions put forth by investee companies, have recommended that investors reject Religare chair Rashmi Saluja’s reappointment as a director at the AGM.
Also read | Takeover twist: Now, Rashmi Saluja sues Religare Enterprises
In his third letter addressed to Sebi chairperson Madhabi Puri Buch, Gaekwad said that his firm had appointed brokerage Prabhudas Lilladher’s investment banking arm, PL Capital Markets, as the merchant banker for his proposed ₹5,000-crore buy of up to 55% of Religare.
“We hope that Sebi will evaluate the substantive aspects of our application favourably and condone the delay in making competing offer given the public interest involved…,” said the letter.
In the latest letter, Gaekwad said he could not file a competing offer application within the mandatory 15 days of the Burmans’ public announcement of an open offer on 25 September 2023 since the situation was full of legal and regulatory complexities.
Under section 11 of the takeover norms, Sebi can grant exemptions to any entity from making an open offer for acquiring shares, or can allow any entity to make a competing offer on certain conditions in order to protect the interests of investors and the securities market if the regulator receives an application in a certain format.
Also read | Two Religare directors criticise haste in revealing Gaekwad bid; Saluja moves high court
Gaekwad claims his offer of ₹275 a share to buy up to 55% of Religare is better than the Burman family’s offer of ₹235 a share.
He said in the letter to Sebi that his financial resources are readily available. Unlike the Burmans, his group has no other non-banking financial company, so it can give Religare its undivided attention and infuse capital.
Endgame approaching
This takeover drama comes at a time when Saluja’s continuation at Religare hangs in the balance.
Last week, Saluja sued the conglomerate she heads and sought the Delhi High Court’s intervention to put a stay on the shareholder meeting.
This was the third such intervention after an investor, Vijayant Mishra, petitioned the Madhya Pradesh High Court’s Jabalpur bench in late December to put a stay on the AGM proceedings. Then, last Tuesday, Bangkok–based investor Sapna Govind Rao made a similar request to the Delhi High Court.
While the Delhi High Court has said it will hear Saluja’s appeal on 4 February, the other two petitions were declined relief.
Also read | Danny Gaekwad’s ₹5,000-crore open offer for Religare unlikely to pass muster with Sebi
Meanwhile, proxy advisory firms Institutional Investor Advisory Services India Ltd (IiAS), InGovern Research, and Stakeholders Empowerment Services (SES), have recommended that shareholders reject Saluja’s reappointment as a director on Religare’s board.
“At this juncture, SES will take a pause and raise a question, “Should the courts interfere in the process of Corporate Democracy?,” proxy advisory SES said in a note dated 28 January. “The answer is a simple, “No”, unless there are pressing circumstances and the petitioner has approached with clean hands.”
Another proxy advisory firm, Bengaluru-based InGovern, questioned the governance inside Religare in a note to investors on Monday.
“The recent shift in the perspectives of some independent directors regarding regulatory correspondence has raised alarms. This inconsistency may indicate internal conflicts and a lack of unified governance, which can undermine shareholder confidence in the board’s integrity and decision-making processes,” InGovern said in the note.
And read | Who is Danny Gaekwad—the US tycoon taking on the Burmans’ open offer for Religare?