Glaxo India Ltd, the Indian subsidiary of British pharma major Glaxo, has reportedly made a bid to acquire the entire 47 per cent stake of the Tatas in Tata Merind, the Tata groups pharma arm. Glaxo India has also expressed its interest in picking up a further 20 per cent through a public offer.
Glaxo has quoted a price of around Rs 150 in its bid which was submitted recently. The quotation is mesmerisingly close to Fridays market price of Rs 155.50.
Approached on the issue two weeks ago, a Glaxo executive said that the companys official policy was not to comment on acquisitions and mergers. Tata Merind executives, on the other hand, denied the move.
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Industry sources, however, confirmed the move saying that the Tata group had decided to exit non-core businesses and pharma was one of them. The valuation of the company has also been completed, said the sources.
In addition, management consultant McKinsey & Co had, in a recent report, told the group to focus on core businesses like steel, auto, hotels, information technology and tea. It had recommended that the group divest its stake in non-core areas like pharma and white goods. In its recent shareholders meeting, Glaxo which has been aggressively pushing for an increase in its market share by expanding its product portfolio had received approval to invest Rs 200 crore to pick up equity stakes in other companies. So had its sister company, Burroughs Wellcome. Analysts say that Tata Merind would be a good investment for Glaxo as the company is a major manufacturer of vitamin B12.
On Friday, the Tata Merind scrip had opened at Rs 160 which was also the days high. The scrip closed at Rs 155.50 on the BSE after touching a low of Rs 155. There was no trading yesterday.