Mumbai: A Kolkata court on Wednesday asked for a postponement in Zandu Pharmaceutical Works Ltd’s 89th annual general meeting (AGM) hours before it was to begin. Zandu is currently fighting a hostile takeover bid by Kolkata-based Emami Ltd.
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This is the second time that the century-old herbal health care firm’s AGM has been cancelled.
The meeting was originally scheduled for 9 August, but was postponed after the Bombay high court restrained the company from going ahead with a shareholder meet following objections from Emami which said it had not received the agenda for the AGM .
The latest postponement comes on the back of a petition from shareholders challenging the company’s decision to appoint new directors—one of the resolutions to be moved at Wednesday’s meeting.
This means that Zandu will have to put on hold its proposal to appoint two new directors to replace outgoing directors P.P. Vora and K. Natarajan. Zandu’s managing director and promoter Girish Parikh declined to comment on whether the company would try to vacate the court’s stay.
In May, Emami bought out the entire 24% in Zandu held by the company’s co-promoters, the Mumbai-based Vaidya family. This helped it increase its stake in the company to 27.5%. The Securities and Exchange Board of India, or Sebi, the capital markets regulator, had approved an open offer by Emami to purchase an additional 20% shares of Zandu from public shareholders after a month.
However, the market price for Zandu shares has, over the past two months, soared, peaking at almost twice Emami’s offer price.
Last week, Emami had to revise the offer price per share from the original Rs7,315 to Rs15,000 a share. Emami’s open offer for public shareholders starts 26 September.
Shares of Zandu dropped 1.64% to close at Rs14,821 on the Bombay Stock Exchange.
“The investors will definitely be looking for a change in the management as they believe that a new management would bring in positive changes, which the company lacked for some time now,” said Arun Kejriwal, founder of the Mumbai-based Kejriwal Research and Investment Services (P) Ltd, said.