Mumbai: Ranbaxy-promoted firm Solrex Pharmaceuticals is expected to have bought a further 3.3 per cent stake in Orchid Chemicals, taking its holding in the Chennai-based pharma company to 14.7 per cent, closer to the threshold limit of 15 per cent beyond which the company will have to make an open offer.

It had been earlier reported on Friday that Solrex had acquired 1.02 per cent shares of Orchid on the BSE, while 1.1 per cent of equity changed hands on the NSE, although the buyer and seller were unknown.

The Securities and Exchange Board regulations stipulate that Solrex should make an open offer for 20 per cent equity once its stake in Orchid touches the 15 per cent threshold.

While Ranbaxy itself said the company did not believe in hostile takeovers, observers do not rule out a takeover attempt and some even believe Ranbaxy to get involved to strike a deal with Orchid.

On Friday, Orchid shares ended 8 per cent higher at Rs247, against a peak of Rs260 and an intra-day low of Rs106.50, on March 24.

The spike fuelled further interest in Orchid shares, which had agreed to a pact with the Ranbaxy group to bring in funds from another investor.

If Solrex's equity goes up to 14.99 per cent, the Ranbaxy group gets close to triggering an open offer, mandatory when it touches the 15 per cent mark. Orchid will have to look at other options if it wants to ward off such a possibility.

Orchid's problems started with its promoter losing about Rs75 crore in a margin-call-related sell-off last month that reduced the promoter stake to 15.8 per cent. Solrex provided finances to Orchid promoter against equity in Orchid.

A CNBC report, meanwhile, said there may be other groups which may also take their stakes above 15 per cent. Ranbaxy may have to make an open offer in the coming weeks, it said.
 
Orchid Chemicals is also likely to claw back into the game and its promoter Raghavendra Rao has not been willing to go for a negotiated deal. He may also rope in some other strategic investors to help save his own shareholding of about 15.9 per cent, the report noted.

Raghavendra Rao has 50 lakh warrants and would require about Rs90 crore to exercise them. Exercising the option would translate into an additional equity of 7.6 per cent. So, there will definitely be a tussle on who controls Orchid and it will reach an interesting stage in the coming days.