Monday, June 2, 2008

Emami comes out with open offer for Zandu

Kolkata, June 2 Emami and a string of entities acting in concert purchased 23.6 per cent stake from one of the promoter groups of Zandu Pharmaceutical Works at Rs 6,900 per share at a total cost of around Rs 130 crore.

The purchase price included Rs 100 each for non-compete fees.

Emami has also announced an open offer for 20 per cent stake in Zandu.

The open offer price has been fixed at Rs 7,315 per share, higher than the purchase price of the majority stake in Zandu.

Strong brand equity and business prospect for Zandu was behind the arrived valuation, Mr Harsha V. Agarwal, Executive Director of Emami said. He said neither the Parekh family, which hold around 18 per cent stake in Zandu, has been approached as of now for Emami’s entry into the management of Zandu, nor it has moved the company for berth on the board. “We would take up such matters after the open offer is complete,” he added.

Anand Rathi Financial Services is the manager to the open offer, which opens on July 24.

The specified date for the offer is June 13 and the last date for revising the offer price is August 1.

The offer closes on August 12. The average price of the Rs 100-face valued Zandu on the bourses in last 26 weeks was Rs 6,807.07 and the past fortnight’s average was at Rs 7,136.91 per share.

Zandu stock on Monday shot up by 19.47 per cent to Rs 9,716.15, but the Rs 2 Emami stock declined by 6.28 per cent to Rs 300.

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