Ranbaxy scrip hits 3-yr high
The Ranbaxy Laboratories scrip closed above its three-year high mark on the Bombay Stock Exchange (BSE) on Friday amidst reports that Pfizer, the world’s largest drug company, could make a hostile bid for India’s largest maker of cheap medicines.
Pfizer may offer a hostile bid against the Rs 737 per share offered to the Singh family, promoters of Ranbaxy, agency and news channel reports said on Friday quoting a business paper. Malvinder Singh, CEO of Ranbaxy, along with his family, own around 35 per cent of India’s second largest drug company by market capitalisation.
Pfizer might bid for 41.3 per cent of the company from institutions and 21.2 per cent from 99 individual shareholders, reports said.
“With Ranbaxy, Pfizer would have a combination like Novartis and Sandoz. Pfizer would get a very strong low cost research base in India, as Ranbaxy has a strong research pipeline,” said Ranjit Kapadia, head of research, private client advisory, Prabhudas Lilladher.
Ranbaxy’s scrip rose to Rs 574.45 in intra-day trade on the Bombay Stock Exchange on Friday before closing at Rs 569 in anticipation of a bidding war. Ranbaxy’s previous high was Rs 558.08 on June 1, 2005.
Krishnan Ramalingam, a Ranbaxy spokesperson, declined to comment on possible offers by Pfizer. “The deal with Daiichi Sankyo is final and binding,” he said. Pfizer India managing director Kewal Handa did not take calls on his mobile phone. However, Handa told Bloomberg, a US-headquartered news agency, that the company would not comment.
Pfizer was trading higher during the day’s trade in both the US and India markets after the report came out. The Pfizer stock was trading up at $ 17.73 on the New York Stock Exchange after a low of $ 17.50 yesterday. The scrip touched an intraday high of 17.96 Thursday.
Pfizer India, the wholly owned Indian subsidiary of the US parent closed at Rs 619.8, up Rs 27.55 from Thursday’s
close after touching an intraday high of Rs 644.35.
Pfizer, based in New York, may offer to buy the 65 percent of Ranbaxy that's not held by the founding Singh family, according to reports. Daiichi Sankyo Co. agreed on June 11 to pay as much as $4.6 billion (Rs 9576 crore) for Ranbaxy to enter the generic-drug market where sales are growing twice as fast as branded medicines.