Miffed by low offer, Religare orders valuation report

livemint.com:

MUMBAI : Religare Enterprises Ltd’s board has commissioned an independent valuation report as it believes that the company is worth more than the price the Burman family has offered, a person with knowledge of the development said. On 23 September, the Burman family, which controls packaged goods company Dabur Ltd, offered to acquire an additional 5.27% stake in the financial services company for ₹407 crore, leading to a mandatory open offer to buy an additional 26% stake from the public. The deal has not closed and is awaiting regulatory approval.

The Burmans said their intended price for both transactions was ₹235 per share, a 15% discount to the ₹275 price the company’s shares were trading at that point. “The board has commissioned a valuation report, and 2-3 companies have been appointed to conduct the exercise," the person said on condition of anonymity. The names of the entities could not be ascertained.

The reports are expected in about two weeks, the person said. A Religare Enterprises spokesperson did not respond to a request for comment. Executive chairperson Rashmi Saluja and two independent directors that Mint contacted did not respond to a request for comment immediately on Tuesday.

One independent director declined to comment immediately. Two others could not be reached. “Under the Takeover Code, the committee of independent directors of the target is required to make a written recommendation about the open offer before the start of the tendering period.

The committee should also state the reasons for its recommendation," said Sudip Mahapatra, a partner at S&R Associates. The financial services company currently does not have a promoter and is run by professionals. Religare Enterprises was earlier