By Ananya Grover
Delivering a setback to the Burmans in their bid to take over Religare Enterprises (REL), the Supreme Court on Friday ordered Digvijay (Danny) Gaekwad to deposit Rs 600 crore as earnest money for his competing bid by February 12.
Consequently, the original offer made by Burman Family Holdings, which received the Delhi High Court’s green signal earlier this week and was to close on Friday, has been kept open till next Wednesday.
A bench of Chief Justice Sanjiv Khanna and Justice Sanjay Kumar said that if Gaekwad does not deposit the said amount, this order will automatically be set aside and warned that non-compliance could be viewed as creating obstacles in the regulatory process.
The apex court also made observations on the Burman family’s open offer for Religare, stating that the offer could proceed at its own risk. The bench noted that if the case is ultimately decided in favour of the Gaekwad family, the Burmans could face significant financial consequences.
The SC also came down hard on the Securities and Exchange Board of India (SEBI) and said that the markets regulator should have exercised greater caution, as shareholders are now being asked to accept prices prevailing 18 months ago.
The top court ordered SEBI to determine the correct date of the detailed public statement of the Burman open offer – October 3, 2023, or January 18, 2025. It also asked the markets regulator to evaluate Gaekwad’s exemption application under the markets regulator’s Takeover Code. If SEBI decides on backward exemption of the application, the open offer will continue 3 days after such a decision, the order stated.
Friday’s order came on the matter in two special leave petitions – one filed by Gaekwad and the other by minority shareholder Sapna Govind Rao. In support of Gaekwad’s offer, Rao wanted the Delhi HC to halt the Religare AGM.
Her plea pointed out that REL’s takeover was mishandled, as Burmans’ offer undervalues the share. It also highlighted the urgency of the matter as selling shareholders within the period of initial open offer from January 27- February 7 are not aware of a competing bid.
Gaekwad’s lawyer informed the court that the Reserve Bank of India (RBI) had granted its approval earlier, but SEBI cleared the offer only in December 2024.
His competing bid – at an offer price of Rs 275 per share is at a 17% premium to the open offer price offered by the Burmans and a 24% premium to the 60-day volume weighted average price of REL’s shares calculated by the company with a reference date of September 22, 2023 (Rs 221) for a 55% stake in the company – was rejected by SEBI, citing non-compliance with the required timelines.