Ranbaxy Laboratories is buying a 14.9% stake in Krebs Biochemicals & Industries in a deal worth Rs. 9 crores. The acquisition falls just short of the trigger point of 15%, which calls for a mandatory open offer for a listed company in India. The promoter of Dr. Reddy’s Laboratories, Anji Reddy, also holds a 5.1% stake in Krebs in his personal capacity.
Krebs is a small Hyderabad-based publicly listed company promoted by its MD RT Ravi, engaged in the business of manufacturing active pharmaceutical ingredients (API). The company has a market capitalization of about Rs. 57 crores. It posted sales of about Rs. 40 crores for the first nine months of FY 2007. Last year Ranbaxy had expanded its in-house API manufacturing capacities by acquiring the Gwalior-based Cardinal Drugs. Ranbaxy has two manufacturing units for APIs in India, at Mohali and Toansa in Punjab.
Ranbaxy would pick up the equity through a preferential allotment at Rs. 85 per share. Krebs’ board had approved the allotment in its meeting held on January 15, 2007. The Krebs scrip moved up 4.98% to close at Rs 99.05 on Wednesday at the BSE. The stock has shot up 26.42% over the past week.
An immediate takeover of Krebs by Ranbaxy appears unlikely. Krebs’ board has also approved the issue of 20 lakh warrants to the promoter group and selected investors to be converted into equity at Rs 74.3 per share within 18 months from the date of allotment. If all the warrants are issued to the promoters, their stake would go up from 45% as of September 30, 2006. And upon conversion of these warrants Ranbaxy’s stake in Krebs would come down to about 11.6%.
Read the article in The Economic Times.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment