MP HC Puts Hold on Burman Family’s Open Offer to Acquire Stake in Religare Enterprises

The Madhya Pradesh High Court’s Jabalpur Bench has stayed the open offer of the Burman family to acquire an additional 26% stake in Religare Enterprises. The order was passed on December 18. The court had passed the order on a petition seeking the setting up of an independent commission of inquiry to monitor the acquisition process. The stay has also delayed the company’s forthcoming annual general meeting (AGM). The acquisition timeline has been shrouded in uncertainty with the decision, which comes on the heels of conditional approval by the Reserve Bank of India and reportedly the Securities and Exchange Board of India.

Legal Challenge and Its Implications for Minority Shareholders

The petition filed in the High Court argues that if the Burman family’s acquisition proceeds, they will control nearly 47.5% of Religare Enterprises, giving them significant influence over the company. The petitioner highlights the potential disadvantages to the company’s minority shareholders, who would be left with a minimal stake while the Burman family and a select group of individuals would hold most of the power. The petition calls for the establishment of an independent commission to oversee the acquisition and protect the interests of the public and minority shareholders.

Possible Delay in the Acquisition Process

While the RBI and SEBI have given their approvals for the open offer, the court’s stay introduces an element of uncertainty. The legal challenge may lead to a prolonged delay in the acquisition process, potentially putting the interests of public shareholders at risk.

Religare Enterprises Share Performance

As of December 27, 2024, 2:10 PM, the shares of Religare Enterprises are trading at ₹284.75 per share with a decline of 5.33% from its previous day’s closing price. Over the last month, the stock has seen a surge of 14.50%. While over the year the stock has surged by 34.80% the stock has a 52-week high and 52-week low of ₹320.00 per share and ₹201.60 per share respectively.

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