Daiichi's 'low' bid for Zenotech faces new hurdles

A day after minority shareholders succeeded in stalling an open offer for Zenotech Laboratories by its Japanese inheritor Daiichi Sankyo, the founder of the Hyderabad-based company, Jayaram Chigurupati, on Wednesday managed to secure a further small victory. The Company Law Board has directed the Zenotech board to meet on 19 August to approve the company's accounts.

This ruling is expected to enable Chigurupati to get first-hand knowledge of the financial situation of the company. Getting a reading of its financial health could be vital to the ongoing dispute over the pricing of the open offer. Zenotech was last year taken over by Ranbaxy Laboratories, which itself has since been taken over by Daiichi.

Chigurupati is also seeking intervention of market regulator Securities and Exchange Board of India in Daiichi Sankyo's open offer to buy the company's shares.

On Wednesday, Daiichi Sankyo announced that it was suspending the open offer, which was due to have opened on Wednesday, after the Madurai Bench of the Madras High Court on Tuesday passed an interim injunction against it. T

The Japanese company had made an offer to buy an additional 20 per cent in Zenotech at Rs113.62 per share, but Zenotech's minority shareholders are demanding Rs160 per share.

Daiichi Sankyo came into possession of 47 per cent in Zenotech after it bought 64 per cent in of India's largest generic drug-maker Ranbaxy. Under SEBI rules, if there is a change in control of a listed firm, the acquirer has to make a compulsory open offer to acquire at least 20 per cent from the company's shareholders.