Ranbaxy, Dr Reddy's may back out from Bradley bid

Leading Indian drug makers Dr Reddy's Laboratories and Ranbaxy Laboratories are unlikely to pursue their bids for the US-based Bradley Pharmaceuticals as the non-binding bids made by them were lower than the others.

According to merchant banking sources in the know, the bids offered by Dr Reddy's and Ranbaxy, between $250 and $300 million, were much lower compared to the bids offered by the two other US firms.

The US-based company currently, commands a market cap of about $330 million. A few months ago, a group of investors, led by President and CEO Daniel Glassman, had offered $360 million ago to buy the company. But the deal could not be concluded due to various issues.

A Ranbaxy executive said the company was unlikely to show further interest in buying Bradley Pharma. The company's spokesperson declined comments. In response to queries, Dr Reddy's spokesperson neither denied nor confirmed the acquisition move and refused to comment.

Last week, the independent special committee of the Board of Directors of the New York Stock Exchange said that Bradley Pharmaceuticals had received preliminary bids but did not divulge further details.

Deutsche Bank Securities is the independent financial advisor for the deal.

Sources noted that Indian pharma sector's attempts at making a big ticket acquisition in the US market were not succeeding mainly due to higher valuations and synergy issues.

Normally it takes 4-5 months to zero in on a target and then another 5-6 months to complete the formalities. After Dr Reddy's acquisition of the German company Betapharm, Wockhardt's acquisition of Negma Lab of France for over Rs 1,090 crore, a few months ago, was the only major foreign buy by an the Indian generic company in two years.

Sun Pharma is yet to complete its planned acquisition of Israeli drug major Taro for $454 million and is awaiting shareholders' approval and court clearances.

Bradley Pharma and Morton Groove were the latest pharma companies that have been put on the selling block in the US, sources said.