The sale of the promoter stake of 33 per cent in Cipla is in jeopardy as potential buyers have baulked at the Rs 1 lakh crore valuation that the Hameid family is seeking for the Indian pharmaceutical company.
Negotiations between the family members and several prospective buyers including private equity firms are no longer moving forward because the promoters are refusing to budge from their asking price of Rs 1,350 per share, which is a premium of almost 10 per cent to the closing price of the Cipla scrip on the BSE on Wednesday.
Shares of the pharmaceutical giant on Thursday ended with marginal gains of 0.53 per cent at Rs 1,234.15.
The Hameid family’s 33.47 per cent stake — data available till June 30 — in Cipla is worth Rs 33,347 crore at the current market price.
The buyer will also have to make an open offer to buy 26 per cent from the public shareholders of the company at the same price acquired from the promoters.
The report said that the family members could sell some or all of their stake.
The members can also lower the ask price or even decide not to go ahead with the sale.
Ahmedabad-based Torrent Pharma is understood to be ahead in the race to acquire the promoters stake and if reports are to be believed, it has been knocking on the doors of private equity firms and institutions that include NBFCs to finance the deal.
While Blackstone also threw its hat into the ring, Torrent is offering a higher sum than the private equity major.
A recent report from Bernstein said that if Torrent is successful in clinching the deal, both companies may need to divest around 15 brands to meet with Competition Commission of India (CCI) rules.
The foreign brokerage said CCI in the past requested acquirers to sell brands where the combined shares might be very high in a particular market.
However, it pointed out that these decisions take into account various factors, and there is no "hard and fast rule’’ to determine which brands need to be sold.
Cipla had reported a 41.34 per cent rise in consolidated net profit at Rs 998.07 crore for the quarter ended June 30, 2023, following strong growth across markets, including India and the US.
It had clocked a consolidated profit after tax of Rs 706.14 crore in the same quarter last fiscal.
