Amid the ongoing battle between Religare Enterprises and the Burban family over its control, the NBFC has received a counteroffer from a U.S.-based investor Danny Gaekwad, who has proposed an open offer for a 26% stake in Religare at ₹275 per share, a 17% premium over the Burmans' offer of ₹235 per share.

Rashmi Saluja-led Religare, in a statement to exchanges, says the offer was made in a letter addressed to the Chairperson of the Securities and Exchange Board of India (SEBI).

The latest open offer proposes to acquire up to 9,00,42,541 fully paid-up equity shares of the face value of Rs 10 each, representing 26% of the Expanded Voting Share Capital of Religare Enterprises from the public shareholders of Religare by M.B. Finmart, Puran Associates, VIC Enterprises, and Milky Investment & Trading.

Gekwad's letter says his company, Danny Gaekwad Developments & Investments Florida, is willing to submit a competing offer for the shares of REL to the public shareholders at Rs 275 a piece of REL, which represents a 17% premium to the offer price offered by the Burmans and a 24% premium to the 60-day volume weighted average price of REL's shares calculated with a reference date of September 22, 2023 (Rs 221).

"Assuming full acceptance of our proposed open offer, our shareholding in REL, along with persons acting in concert with us, will be (88523932)% of the issued and outstanding equity share capital of REL, which is equal to or greater than proposed post-offer shareholding of the Burman family," his letter states.

In his rationale behind the offer, Gaekwad says he believes the business of REL is robust and will be even better with a stable and committed promoter or investor who can provide adequate capital and undivided attention to the business. "Unlike the Burmans, I do not have any other NBFC in our group and will be able to provide our undivided attention and infuse capital into the business."

He says the Burmans' offer grossly undervalues the real worth of REL, and that it fails to disclose how they propose to comply with RBI-mandated condition of consolidation of NBFCs within Religare and Burman groups, which will impact REL shareholders. "At the time the offer was made on September 25, 2023, the offer price was already at a discount of 15% to REL's prevailing market price of around Rs 271 per share. Even considering the closing price of REL shares on January 22, 2025, the Burmans' open offer price is at a steep discount of 7%."

He says the Burmans' offer is "conspicuously silent" on the nature of the approval granted by the RBI to it on December 9, 2024. "Such approval is conditional on consolidation of multiple NBFCs within the Burman group".

He says the Burmans have not made any disclosure on the contours of the consolidation plan and potential impact on REL shareholders. On the contrary, he says, its letter issued on January 18, 2025, gives a wrong impression that the RBI's approval was "unconditional".

He says his company is unsure whether the Burman group has a "genuine intention" to comply with the RBI-mandated condition or not. "Public shareholders are in the dark and do not have sufficient information to evaluate whether the Burmans' offer is genuine or depressed."

SEBI gave its approval to the Burmans' open offer on December 20, 2024, after the RBI approval on December 9, 2024. However, Gaekwad says there is a genuine opportunity for his company to make a "completing offer" that offers a "better deal" to public shareholders of REL.

The company says its delay in not seeking SEBI's permission to make a competing offer earlier should be "condoned" in the interest of shareholders. "We request SEBI to issue requisite directions to keep the tendering period for the Burmans' open offer as announced in their LOF in abeyance for the time being so that tendering by public shareholders in both the Burmans' open offer and our competing offer can occur simultaneously."

Notably, the MP High Court in December had stayed the Religare AGM and the RBI's approval for the Burmans' offer, which was lifted on January 10, 2024, on the ground that the petitioner was not a shareholder in the company.

On Wednesday, independent directions of Religare Enterprises requested shareholders to evaluate the offer and make an informed decision in their best interest about tendering their shares in the open offer.  

"The offer price is about 15% lower than the closing market price of approximately Rs. 271 per share on the National Stock Exchange on September 22, 2023, being the trading day immediately prior to the date of the PA. The closing price of the Target Company’s shares on the NSE Limited as of January 22, 2025, was approximately INR 253. The Offer Price is at a discount of about 7% to the abovementioned closing price. The volume weighted average market price of the shares for sixty trading days preceding the date of this recommendation is INR 280. The Offer Price is at a discount of 16% to such volume weighted average market price. "

Interestingly, the RBI granted conditional approval for the acquisition on December 9, 2024. Among the conditions outlined by the central bank was the need for compliance with regulatory norms and the consolidation of control among the respondents involved in the deal. The legal dispute between the Burmans and Religare’s management started after the promoter family of Dabur proposed an open offer to get control of Religare Enterprises.