Shares of Religare Enterprises tumbled over 7% in early trade on Monday after the Burman group-owned entities announced an open offer to acquire up to 26% equity stake in the diversified financial services group. The floor price for open offer has been fixed at ₹235, a discount of 13.74% to the stock's Friday’s closing price of ₹272.45 on the BSE. The deal's total value is ₹2,116 crore, payable in cash.
The Burman family, through its group entities, is currently the single largest shareholder in REL, and holds around 21% stake through M.B. Finmart Private Limited, Puran Associates Private Limited, VIC Enterprises Private Limited, and Milky Investment & Trading Company. All four entities have jointly announced an open offer to acquire up to 90,042,541 fully paid-up equity shares of the Mumbai-based firm.
“M.B. Finmart Private Limited, Puran Associates Private Limited, VIC Enterprises Private Limited, and Milky Investment & Trading Company have announced an open offer for acquisition of up to 90,042,541 fully paid-up equity shares of face value of ₹10 each from the public shareholders of Religare Enterprises Limited, representing 26% of the expanded voting share capital of the target company, at a price of ₹235 per equity share aggregating to a total consideration of up to ₹21,159,997,135, payable in cash,” Religare says in a BSE filing today.
Post acquisition, the Burman group’s stake in Religare Enterprises will increase to around 57%.
Anand C Burman, Chairman Emeritus, Dabur India, said: “The proposed transaction is in line with our vision to create a leading financial services platform that encompasses lending, broking and health insurance services. We are convinced that REL is the right platform and positioned for sustained success. With our guidance, REL will continue its journey to being one of India’s distinguished financial services platforms.”
Reacting to the news, Religare Enterprises fell as much as 7.35% to hit a low of ₹252.40 on the BSE. The smallcap stock opened lower at 271 against the previous closing price of ₹272.45, with more than 1 lakh shares changing hands over the counter in the first hour of trade so far. The market capitalisation slipped to ₹8,630 crore.
Religare Enterprises shares touched a 52-week high of ₹280.30 on September 21, 2023, rebounding 115% from its 52-week low of ₹130 touched on March 6, 2023. The stock has risen 69% in a year; 54% in the calendar year 2023; and 84% in the past six months. In the last one month, the counter added nearly 14%, while it gained over 1% in a week.
As per the exchange filing, “The acquirers (Burman group) intend to take control of REL once the open offer is concluded in accordance with the provisions of the SEBI (SAST) Regulations. The acquirers reserve the right during the interim period, pending completion of the open offer, to appoint directors to the board of directors of REL and take all measures to assume control of REL, subject to complying with the provisions of the SEBI (SAST) Regulations.”
“Further, the acquirers intend to review the management structure of REL and its subsidiaries, and subject to complying with the provisions of the SEBI (SAST) Regulations, reserve the right to require REL and its subsidiaries to implement such changes in the management structure as determined by the board of directors of REL,” it adds.
The completion of the open offer is subject to receipt of statutory approvals required. JM Financial acted as the exclusive financial advisor to the acquirers and will act as the manager to the open offer. TT&A and Anagram Partners acted as legal advisors.
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