• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books
• Gallery

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Our Bureau

Mumbai, June 25 It has not been a smooth sailing for multinational drug companies Novartis and Pfizer looking to hike stake in their Indian arms.

Novartis’ open offer to hike equity in its local arm to 90 per cent did not meet the projected benchmark, despite the participation of institutional investors.

The parent company has managed to increase its stake to 76.4 per cent.

In a communication on Thursday, Novartis said that it had completed its open offer to acquire an additional stake in its majority-owned Indian subsidiary, Novartis India Ltd, increasing its holding to nearly 76.4 per cent from the previous level of 50.9 per cent.

To pick up the additional 39 per cent in Novartis India, the Swiss parent also had to revise its offer price upwards from the initial Rs 351 to Rs 450 per share. The price was fair and the response was good since most institutional investors tendered their shares, said an investment banker familiar with the deal. The company failed to meet its target because of the change in market sentiment to a more bullish phase, he said. On Novartis’ road ahead, it is evaluating its options, he added.

A pharma analyst observed that if Novartis was headed for the 90 per cent benchmark, it could go in for another open offer at a later date. Analysts say the company is looking to delist itself from the local exchange, though Novartis has made no such statement.

The transaction represents a total value of about Rs 370 crore and almost all large institutional investors and quasi-institutional shareholders participated in the offer, Novartis said.

Novartis shares were marginally down, at Rs 428, on the BSE.

Pfizer too has increased its offer price to acquire a 33.77 per cent stake in Pfizer Limited from public shareholders. It is now offering Rs 830 per share, up 23 per cent from the original offer price of Rs 675 per share. The price revision was expected by the market, given the precedent set by Novartis’ open offer.

Pfizer’s revised offer was at a premium of 33.5 per cent to the closing share price of Rs 621.55 of Pfizer Limited on April 9, 2009, on the NSE, the last trading day before the announcement of the tender offer, the company said in a note on Thursday.

This proposal represents Pfizer’s final price revision to the offer, as June 25 is the last day on which the offer price can be revised as per the SEBI Regulations, 1997, the note added.

Pfizer shares were down close to 4 per cent, at Rs 820 on the BSE.

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line