In a strategic move that has captured the attention of investors and market observers alike, the Burman family, through its entities MB Finmart, Puran Associates, VIC Enterprises, and Milky Investment & Trading Company, has unveiled an open offer to acquire a substantial 26% stake in Religare Enterprises. The offer price has been set at Rs 235 per share, amounting to a total consideration of Rs 2,115.99 crore in cash. This development positions the Burman group as the single largest shareholder in Religare Enterprises.
As of June 30, 2023, public shareholders, including MB Finmart (1.71%), Puran Associates (5.61%), VIC Enterprises (3.72%), and Milky Investment & Trading Company (2.94%), held a combined 26% stake in Religare Enterprises. The announcement of the open offer at a price of Rs 235 per share represents a 13.74% discount to the closing price of Rs 272.45 on the previous trading day.
This significant move by the Burman family underscores their commitment to enhancing Religare Enterprises’ position in the financial services sector. The open offer seeks to acquire up to 90,042,541 fully paid-up equity shares from public shareholders, thus expanding their voting share capital.
Anand C Burman, Chairman Emeritus of Dabur India, expressed his perspective on the proposed transaction, stating, “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 Religare 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.”
The Burman group’s active involvement in Religare Enterprises became evident on August 16 when they increased their stake in the diversified financial services company to approximately 21%. This acquisition saw them purchase 2,45,01,000 shares at Rs 217.95 apiece from the open market. Mohit Burman, Chairman of Dabur India, had previously affirmed the Burman family’s long-term commitment to Religare Enterprises, highlighting their view of it as a unique financial services platform.
Assuming full acceptance of the open offer, the Burman family would hold 177,129,209 shares, equating to a commanding 53.94% stake in Religare Enterprises. This substantial ownership stake would grant them significant influence over the company’s strategic decisions and future direction.
In compliance with the Securities and Exchange Board of India (SEBI) Substantial Acquisition of Shares and Takeovers (SAST) Regulations, Religare Enterprises clarified the intentions of the acquirers in a statement, saying, “The acquirers intend to take control of the target company once the open offer is concluded in accordance with the provisions of the SEBI (SAST) Regulations. The acquirers reserve the right in the interim period, pending completion of the open offer, to appoint directors to the board of directors of the target company and take all measures to assume control of the target company, subject to complying with the provisions of the SEBI (SAST) Regulations.”
It’s worth noting that the successful completion of the open offer is contingent upon receiving the requisite statutory approvals. To navigate this complex process, JM Financial has been appointed as the exclusive financial advisor to the Burman family, while also serving as the manager for the open offer. Legal advisory services are being provided to the Burmans by TT&A and Anagram Partners.
The Burman family’s move to acquire a substantial stake in Religare Enterprises not only highlights their confidence in the company’s prospects but also reflects their strategic vision to play a pivotal role in shaping the future of India’s financial services landscape. As this development unfolds, market participants will be closely monitoring the response of Religare Enterprises’ shareholders and regulatory authorities, anticipating the impact of this significant transaction on the company’s trajectory.
