Stay on Daiichi open offer for Zenotech

Stay on Daiichi open offer for Zenotech

New Delhi: The Securities Appellate Tribunal (SAT) on Friday stayed Japanese drug maker Daiichi Sankyo Co. Ltd’s open offer for 20% of Hyderabadbased Zenotech Laboratories Ltd. SAT has posted the case for hearing on 4 September.

This came after Daiichi had announced it would commence the open offer to buy Zenotech on 11 August.

Zenotech and Daiichi have been at loggerheads since Daiichi acquired Ranbaxy Laboratories Ltd, over the price of the open offer shares. While Zenotech is asking for a price of Rs160 a share, Daiichi has refused to offer any more than Rs113.62, 29% lower than the price Ranbaxy had paid it.

Market regulator Securities and Exchange Board of India requires Daiichi, which acquired 63.9% of Ranbaxy in November, to make an open offer to Zenotech because Ranbaxy holds a 46.95% stake.

Daiichi was previously to launch the open offer on 15 July. However, on 14 July, the Madurai bench of the Madras high court granted interim injunction in connection with the offer. Later, on 24 July, the bench dismissed the petition. Daiichi had also filed a special leave petition before the Supreme Court (SC). On 24 July, the SC granted a stay on any further proceedings in connection with the Madurai bench order. Two weeks earlier, Jayaram Chigurupati, promoter-CEO of Zenotech filed an appeal with the SAT.

“There was no reason for Daiichi to announce the offer today. They should have waited till the hearing is complete. Now till the next hearing they cannot go ahead with the offer," said a senior executive at Zenotech, who did not want to be named.