NEW DELHI: Eyeing to increase its presence in the financial space, the Burman family of FMCG major Dabur is all set to acquire a majority stake in the diversified financial services group Religare Enterprises. If successful, the Burmans will have a controlling stake in the company. Four Burman family firms have made an open offer to acquire a 26% additional stake in Religare for Rs 2,116 crore.
In an exchange filing made on Monday morning, Dabur has put forward its intention to acquire up to 90,042,541 shares at Rs 235 each, a steep discount from its current market price. Religare shares fell more than 7% to close at Rs 253 on Monday.
“The proposed transaction is in line with our vision to create a leading financial services platform that encompasses lending, broking and health insurance services,” Anand Burman, Chairman emeritus at Dabur India. “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.”
A senior analyst tracking the banking/NBFC space said this acquisition is beneficial for Dabur as well as Religare. “The Burmans are looking to diversify beyond the FMCG space and there is no better way to do it than by acquiring a well-known player in the fast-growing financial and insurance space,” said the analyst requesting anonymity.
Religare is a Delhi-based diversified financial services company, which offers services in over 400 cities. Its services include loans to SMEs, affordable housing finance, health insurance and retail broking. It was formerly promoted by Shivinder and Malvinder Singh, who were accused of fund diversion from Religare Finvest, the group’s NBFC business.
“The Board notes the acquirers are existing significant shareholders of the company and have had an impeccable reputation and exemplary standing in the industry over these years. We view this intention of acquisition of control in the Company as a positive step reflective of the strong business platform on which the Company stands,” Religare said in a statement. The Burmans will have the right to appoint directors to Religare’s board and make changes in the management structure as determined by its board.
Burman companies -- MB Finmart Private Limited, Puran Associates Private Limited, VIC Enterprises Private Limited, and Milky Investment & Trading Company -- currently hold over 25% stake in Religare. According to the current Securities and Exchange Board of India (SEBI) norms, an entity buying a 25% stake in a listed firm will have to mandatorily make an open offer for additional 26% of the shares.
Taking A firm grip
Four Burman family companies have made an open offer to acquire a 26% additional stake in Religare for Rs 2,116 crore
Burmans will have a controlling stake in the company after acquisition
Dabur to acquire shares at Rs 235 each, a steep discount from its current market price
Burman companies — MB Finmart Private Limited, Puran Associates Private Limited, VIC Enterprises Private Limited, and Milky Investment & Trading Company — currently hold over 25% stake in Religare
As per current SEBI norms, an entity buying a 25% stake in a listed firm will have to mandatorily make an open offer for additional 26% of the shares
Religare shares fell more than 7% to close at Rs 253 on Monday