Personal care products maker Emami today nearly doubled its open offer to acquire a 20 per cent stake in country's oldest ayurvedic pharma firm, Zandu Pharmaceutical Works. The offer was raised to Rs 15,000 a share from the earlier Rs 7,315.
The share price of Zandu today fell by 5 per cent to close at Rs 16,728 on the Bombay Stock Exchange. The Emami stock too fell by 2.9 per cent at Rs 279.60.
“We have always kept the interest of the minority shareholders in mind and thus decided to come up with a revised offer in the wake of the prevailing market condition,” said Harsh V Agarwal, director, Emami Group of Companies.
According to sources close to the development, the Agarwals, the promoters of Emami, were forced to raise offer price as no settlement could be reached with the Parekhs, the promoters of Zandu.
The Agarwals' attempts to enter the board of Zandu and share management control have been stalled by the Parekhs, whose open market share purchases have taken Zandu shares skyhigh.
As per the data from the stock exchange, the Praekhs have raised their stake by nearly 2 per cent in the company in the past couple of months.
The share price of Zandu, which rose over three times in the past couple of months, skyrocked to touch a high of Rs 24,643 on BSE on July 24.
In order to ward off a takeover bid by Emami, the Parekhs also approached the Securities and Exchange Board of India (Sebi) and the Companies Law Board. The Parekhs claim that they have the first right to buy the Vaidyas' stake.
In May 2008, Emami entered into an off-market deal with the Vaidyas, who were the co-promoters of Zandu, to pick up 23.6 per cent stake in the company.
The deal was inked for a total sum of about Rs 130 crore at an offer price of Rs 6,900 per share to the Vaidyas (inclusive of non-compete fees of Rs 100).
With this, Emami currently holds a total of 27.5 per cent stake in Zandu while the Parekhs hold over 40 per cent in the company.
