Ranbaxy affiliate Zenotech objects to open offer pricing

19 January 2009

In another David and Goliath replay, Zenotech Laboratories has called upon the directors of Daiichi Sankyo to honour the commitment made by its management team and revise its open to the originally stated Rs160 per share.

Daiichi board had made the offer of Rs160 in July 2008. With the stock markets haveing fallen subsequently, Zenotech shares have been hovering around 115 per share.

Dr Jayaram Chigurupati, managing director of Zenotech has alledged that the agreement was ratified twice and was infact in place till the eve of 15 January 2008.

Today, Daiichi had offered to purchase upto 68,85,000 fully paid-up equity shares of the Zenotech, representing 20 per cent of the current paid up equity share capital at a price of Rs113.62.

At the beginning of the year, Daiichi Sankyo Company Limited announced that it plans to record a valuation loss and one-time write-down of goodwill on its investment in group subsidiary Ranbaxy Laboratories Limited for the fiscal third-quarter ended 31 December 2008.

Daiichi Sankyo had acquired a controlling stake in Ranbaxy, and the deal also enable it to acquire a majority stake through an open offer for Zenotech, in which Ranbaxy held 45 per cent. In April 2007, Ranbaxy Laboratories had raised its stake in Hyderabad-based Zenotech Laboratories to 45-per cent from the previously held 7 per cent, for Rs214 crore.