Mumbai: Shares of Piramal Healthcare Ltd surged on Monday on speculation that a foreign company present in India was acquiring a controlling stake in the Mumbai-based drug maker.
Traders named France’s Sanofi Aventis SA and the UK’s GlaxoSmithKline Plc (GSK) as potential buyers of the Ajay Piramal-led pharma company.
“There have been market speculation about this for some time now, but I have no confirmation,” said a spokesman for Piramal.
“These are rumours and we will not comment on market speculations,” said Aparna Thomas, director (communications), Sanofi Aventis India. A spokesman for GSK, too, said the company wouldn’t comment on market speculation.
On Monday, Piramal shares rose around 7% to Rs537 on the Bombay Stock Exchange (BSE). The benchmark Sensex index lost 0.94% to end at 16,835.56 points.
GSK and Sanofi are scouting for acquisitions in India.
Analysts see potential for high valuations for firms such as Piramal Healthcare, Dr Reddy’s Laboratories Ltd and Cipla Ltd in the event of a strategic acquisition by a foreign firm.
Talk of possible acquisitions of Indian drug makers by foreign firms has increased after Japanese firm Daiichi Sankyo Co. Ltd bought India’s largest pharma company Ranbaxy Laboratories Ltd for $4.6 billion (Rs21,022 today) two years ago.
Piramal’s valuation has doubled from $1.5 billion two years ago, when the speculation first cropped up, but it could still be “a good bet for foreign buyers”, said an analyst with a foreign brokerage, who didn’t want his name or organization to be identified. “The likelihood of a deal seems bright.”
In 2009, some media reports said GSK had begun takeover talks with Piramal, but the Piramal family—the controlling stakeholders—had denied the possibility.
(Radhieka Pandeya in New Delhi contributed to this story.)