The Hindu Business Line : Emami buys out Vaidyas in Zandu Pharma

Kolkata, May 30 Emami Ltd on Friday bought out the entire stake of the Vaidya family, one of the two promoter groups, in Zandu Pharmaceutical Works Ltd.

Mr Harsha Vardhan Agarwal, Executive Director of Emami, told Business Line that Emami would share management control with the Parekhs, the other promoter group of Zandu. “We would be working together with the Parekh family for the future growth of Zandu,” he said.

Through a share purchase agreement with Vaidyas, Emami has bought around 24 per cent stake, to take its total holding to 27.5 per cent in Zandu. Mr Agarwal said the buyout was done in two tranches. He, however, did not divulge the purchase price. According to market sources, Emami paid a price of over Rs 8,000 per share of Zandu of face value Rs 100 each.

The mandatory open offer (to the public shareholders for another 20 per cent or 1.61 lakh shares), which would be announced next week, if fully responded to, would take Emami’s total stake in Zandu to 47.5 per cent.

As on March 31, 2008, the Vaidyas and the Parekhs jointly held 41.99 per cent, while the public and institutional holding was 58 per cent.

The Rs 2 Emami stock went up by 8.75 per cent on the NSE on Friday to close at Rs 317.65 , while Zandu finished at Rs 8,132.80, showing a gain of 16.25 per cent

For the Kolkata-based Rs 600-crore Emami, Zandu will be a major move after it acquired Himani Ltd a few decades ago. Emami last year unsuccessfully bid for Indonesian company Unza, which was finally taken over by Wipro. Emami has in its portfolio hair care and skin care products such as Navratna oil, Boroplus antiseptic cream and Fair and Handsome Cream.

Zandu Pharma has some ayurvedic health care products and brands under its belt with R&D and marketing expertise. In the first three quarters of 2007-08, Zandu had revenues of Rs 120 crore.

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