Astra open offer for Indian subsidiary

Mumbai: Astra Pharmaceutical AB of Sweden has informed the Securities and Exchange Board of India and the Bombay Stock Exchange (BSE) of its decision to make an open offer to the balance shareholders of Astra Zeneca Pharma India Ltd to buy the 43.5-per cent holding in its Indian subsidiary, which it does not already hold.

The open offer is scheduled to commence on 29 April 2002 and will close on 28 May 2002. It is managed by DSP Merrill Lynch and the registrar to the offer is Karvy Consultants. The offer price of  Rs 375 per share offers a premium of 31 per cent over Astra Zeneca India’s average price of the week ending 1 March 2002, and a 44-per cent premium to the average price for the previous six months. This open offer is not conditional to any minimum levels of acceptances and is subject to the necessary statutory approvals, an Astra Zeneca release said here.

The Astra Zeneca group globally operates on a centrally adopted strategy of 100-per cent control of all its operating units. The ownership of Astra Pharmaceuticals in Astra Zeneca India is sought to be brought in line with the standard practice of the group across the globe.

Astra Zeneca India’s equity shares are not actively traded on Indian bourses. The combined total volume on the BSE and the National Stock Exchange for the last 26 weeks is 73,597 (1.5 per cent of the paid-up share capital). Hence this offer has been made to provide an opportunity to public shareholders to make an appropriate choice under the prevailing circumstances, the release said.

Astra Pharmaceuticals has a 56.5-per cent stake in Astra Zeneca India. It has made an open offer for the entire balance outstanding equity shares, comprising 2,175,050 shares and representing 43.5 per cent of the total equity of Astra Zeneca India, from the existing shareholders at a price of Rs 375 per share, which, if subscribed fully, will enhance its holding to 100 per cent in Astra Zeneca India and lead to the delisting of the company.

The business of Astra Zeneca India being highly-researched, brand- and technology-driven requires the company to invest substantial financial resources. It is also likely to limit its profitability in the medium term. The transfer of technology, brands, resources and know-how is greatly facilitated within Astra Zeneca by the complete ownership.