New Delhi: Japanese drug maker Daiichi Sankyo Co. Ltd’s open offer to acquire an additional 20% stake in Hyderabad-based Zenotech Laboratories Ltd has hit a hurdle. Zenotech has questioned Daiichi’s offer of Rs113.62 a share, which is 29% lower than the price Ranbaxy Laboratories Ltd had paid it.
Market regulator Securities and Exchange Board of India, or Sebi, requires Daiichi, which acquired 63.9% of Ranbaxy last November, to make an open offer to Zenotech because Ranbaxy holds a 46.95% stake in the firm.
Ranbaxy had added to its 7% stake in Zenotech in October 2007 at a price of Rs160 per share. Soon after, Ranbaxy had announced an open offer to buy 20% in the company at the same price. Zenotech shares closed at Rs.98.05 on the Bombay Stock Exchange, or BSE, on Monday.
Zenotech’s managing director Jayaram Chigurupati has sought the market regulator’s intervention, questioning the new offer price. “There are other regulations in Sebi, according to which Daiichi should have made the open offer to Zenotech in June 2008 itself, but they didn’t,” he said.
Chigurupati said he had been assured by Ranbaxy chairman and chief executive officer Malvinder Mohan Singh in July last year that an open offer by Daiichi Sankyo would be made at the same price. In the statement to BSE, he said Daiichi should have made the open offer to Zenotech shareholders at the same time they did to Ranbaxy shareholders.
“The open offer by Ranbaxy has nothing to do with the one made by Daiichi now,” a spokesperson for the firm said. “Daiichi will stand by the open offer price of Rs113.62 and not Rs160. The price we have quoted in the open offer is based on Sebi rules.”
One analyst said Daiichi’s offer was based on the average price of Zenotech shares in the past six months. “Daiichi is well within the rules and regulations of Sebi,” said Ranjit Kapadia, head of research (private clients group) at brokerage Prabhudas Lilladher Pvt. Ltd.