Piramal Health denies stake sale reports, shares fall

Piramal Health denies stake sale reports, shares fall

Mumbai: India’s Piramal Healthcare Ltd on Wednesday denied media reports the founders were selling a stake in the drug maker, pushing its shares down more than 8%.

Earlier in the day, the company’s shares had risen as much 6.5% on market talk that Piramal management was in talks to sell a stake to a global pharma major.

“There is no proposal by the promoter for selling any stake in the company," Piramal Healthcare said in a statement to the stock exchanges.

Local television channels, citing sources, said French drugmaker Sanofi-Aventis and Pfizer Inc were in negotiations to acquire Mumbai-based Piramal Healthcare.

Shares in Piramal Healthcare, which the market values at about $2.5 billion, ended 3.2% lower at Rs524.95, after having fallen as much as 8.2% after the company denial.

The Mumbai market ended down 2.8%.

CNBC TV18 reported Pfizer was the highest bidder for taking over Piramal and the deal size could be between $1.5 billion and $1.8 billion. It said two other global drugmakers were also in the fray and the takeover talks were in the final stages.

ET NOW television channel said Sanofi-Aventis could acquire Piramal.

“Piramal could be an attractive target for any big pharma company who are trying to enhance their presence in key emerging markets and India is a very important emerging market," said Bino Pathiparampil, an analyst with brokerage IIFL.

“The main strength of Piramal is its domestic business."

Formulation Business

Both Sanofi and British drug firm GlaxoSmithKline have been linked in the past to a bid for Piramal’s formulation business.

Glaxo, however, has not been involved in talks for many months, one person familiar with the situation but not directly involved in the talks told Reuters in London on Tuesday.

“It seems almost 100% certain that Sanofi will get it," the person said.

Sanofi and Glaxo declined to comment on Tuesday.

A deal with Piramal would be an endorsement of Sanofi-Aventis chief executive Chris Viehbacher’s drive into emerging markets and underscore the key role that India plays as a supplier of cheap medicines to wider markets.

Last July Sanofi took control of unlisted Indian vaccines maker Shantha Biotechnics and other multinationals have also stepped up alliances with local drugmakers recently.

In the past, Western drugmakers have viewed Indian generics companies with deep suspicion. But attitudes have changed as slowing markets at home and a “cliff" of patent expiries have forced big drugmakers to explore new business models.