Emami buys 27.5 per cent in Zandu; to make open offer

31 May 2008

The Emami Group has acquired a 27.5 per cent stake in ayurvedic products firm Zandu Pharmaceutical Works Ltd. In the process, Emami bought out the entire stake of the Vaidya family, one of the two promoter groups in Zandu.

Emami started the acquisition with a 3.9 per cent buy from the market. Then on 28 May, it bought another 14.81 per cent shares, followed by an additional 12.7 per cent on 30 May from one of the existing promoters.

According to market sources, Emami paid a price of over Rs8,000 per share of Zandu of face value Rs100 each.

Under the Securities and Exchange Board of India take-over regulations, Emami is required to make an offer for a minimum 20 per cent additional sake in Zandu.

Emami, which is looking for more buy-outs, is expected to make an open offer for the entire stake in Zandu Pharmaceuticals.

Emami will fund the buyout through internal accruals.