Saturday, February 3, 2007

Cipla joins hands with PE funds for Merck generics bid

Indian pharma major Cipla is teaming up with private equity funds to work out an innovative financing model for bidding for Merck’s generic business. While the acquisition will be funded by PE funds, Cipla will assume key management responsibilities of the generic division if the consortium wins the bid. The domestic drug major will get a percentage of the profits as a management contract fee and will also have the option of gradually increasing its stake in the generic business. Unconfirmed reports say that Cipla would annually get about 20% of the profits from Merck’s generics business and 2% additional stake every year. The name of the PE firms that Cipla is tying up with has not been disclosed yet.

Read more in The Economic Times article.

Percept Picture Company to offload 30% stake to Lachlan Murdoch

Lachlan Keith Murdoch, son of media mogul Rupert Murdoch, is in advanced stages of negotiations to acquire around 30% stake in Percept Picture Company (PPC) for roughly around Rs. 250 crores.

Percept Holdings is media business house with over 900 people across three continents in 61 offices with capitalized billings of Rs. 1321 crores. Apart from the movie entertainment division PPC, in which it holds 75% , Percept Holdings also has a celebrity management company, an advertising agency, an outdoor media business and a PR firm in its portfolio.

India’s media and entertainment sector has been attracting a lot of funding now-a-days. In 2005, Temasek Holdings of Singapore took a 14.9% stake in Mumbai-based Shringar Films. Last year, Australia-based Macquarie Bank acquired about 6.6% in entertainment company UTV Software Communications with Walt Disney also acquiring 14.9 % in the firm. In November 2006, Ten Sports too finally sold its controlling stake to Zee in a cash deal worth over Rs. 256.6 crores. Recently, Nimbus Communications received a fresh round of PE funding worth Rs 552 crore from 3i, Cisco and Oman Investment Fund (Post). Reliance Capital has picked up controlling stake in Adlabs and Synergy Communication.

Read more in The Economic Times article.

Government to review FDI policy in March

The Indian Government is considering a number of changes in the current foreign direct investment (FDI) policy governing the activities of the various foreign entities invested and wanting to invest in India. Some of the proposals include –

· Acquisition of stake in Indian commodity exchanges by foreign investors
· Annual reviews of FDI policies in all sectors instead of one sector a month as at present
· Removal of the mandatory clause for petroleum companies to disinvest 26% in Indian subsidiaries in five years
· Review of the 10% cap on voting rights in subsidiaries of foreign banks
· Hike in the 49% cap in air transport services including activities like charter flights, ground handling and helicopter services and clear definition of all aviation activities and the relevant FDI cap
· Increase in the FDI cap in retail, currently at 51% in single-brand retail and 100% in wholesale cash-and-carry

The proposal would be submitted to the Union Cabinet this March.

Read more in the Business Standard article.

Go Air to divest 26% stake to Gatx Corporation, Wellington Management

Low cost carrier Go Air, owned by the Wadia Group, is in talks with to private equity firms for divesting as much as about 26% stake. Go Air may sign a deal with Chicago-based Gatx Corporation and Boston-based Wellington Management fir offloading 26% stake in the company. The valuation of Go Air is pegged at around Rs. 400 crores.

The Gatx Corporation, through its arm Gatx Air, is into leasing narrow-body aircraft to commercial airlines worldwide. Gatx Air owns 150 aircraft, 46 owned and ownership interest in 104 aircraft through joint ventures. Wellington Management holds significant equity in several global airlines including US Airways, Northwest Airlines, and Continental Airlines besides equity stake in AMR - the parent company of American Airlines. Go Air has had discussions with Jet Airways as well for an equity stake sale.

Read the article on ndtvprofit.com.
Related Posts:
Texas Pacific pulls out of investing in SpiceJet
Air Deccan seeks $75-100 mn private equity; hires Edelweiss for PE syndication

Swiss Finance Corporation invests additional Rs. 9 crores in Nitco Tiles

The Economic Times reports that Mauritius-based Swiss Finance Corporation Limited has picked up 380,000 shares of Nitco Tiles for around Rs. 9 crores. Its stake in the company now stands at nearly 6%. The shares were bought in an open-market transaction. Swiss Finance earlier had 4.27% stake representing 951,000 shares in Nitco Tiles. Its total number of shares has now gone up to almost 1.33 mn in Nitco.