Kolkata: Having secured 70.34% stake in, and management control of, Zandu Pharmaceutical Works Ltd, Emami Ltd has invited members of the Parikh family, who ran Zandu till now, to join its restructured board as independent directors.
Personal-care products maker Emami wrested control of herbal health care firm Zandu last month after the Parikhs sold their 22.8% stake in it, and a public offer to buy 20% more was fully subscribed, largely because of the support of the extended Parikh family.
Members of the Parikh family who are currently on Zandu’s board—Girish Parikh, managing director, and D.M. Parikh, executive director—are expected to resign in a couple of months.
Zandu’s new board is likely to be headed by Emami’s co-chairman, R.S. Goenka, according to Aditya Agarwal, a director of the Kolkata-based Emami. Zandu is currently headed by Y.P. Trivedi, a parliamentarian and former director of Reliance Industries Ltd, who is non-executive chairman on its board.
“They have run the company for 98 years, and have a wealth of experience that we’d like them to share with us,” said Agarwal. “Also, we appreciate the fact that having founded the company and managed it for so long, they must be emotionally attached to it.”
It isn’t immediately known if the Parikhs would accept Emami’s offer. Calls made to Girish Parikh were not answered.
People who led the hostile takeover battle for Emami—chairman R.S. Agarwal and his son Harshvardhan—are currently in Mumbai, taking stock of things at Zandu. According to Aditya Agarwal, the change in management will take two to three months.
The battle for control of Zandu started in May when Emami bought some 24% stake from the Vaidya family, the principal founders of the herbal health care company, and launched an unsolicited bid for 20% more of its shares and management control.
Emami, which had priced its public offer at Rs7,315 a share, raised its bid to Rs16,500. That is the price at which the Parikh family eventually sold out its stake after opposing the takeover bid for at least four months.
The Vaidyas had sold their 24% stake in May for Rs6,900 a share. According to Aditya Agarwal, Emami paid around Rs700 crore for its stake in Zandu, valuing the company at some Rs1,000 crore.