Ranbaxy Laboratories and Sun Pharmaceuticals Industries rose by 1.86% to 2.64% at 10:08 IST on BSE on reports the Andhra Pradesh High Court lifted a temporary stay it imposed on Sun Pharmaceutical Industries' takeover of Ranbaxy Laboratories.
Ranbaxy Laboratories (up 2.64%) and Sun Pharmaceuticals Industries (Sun Pharma) (up 1.86%), edged higher.
The S&P BSE Sensex was up 311.66 points, or 1.26% at 25,005.01.
Shares of Ranbaxy Laboratories (Ranbaxy) had underperformed the market over the past one month till 23 May 2014, falling 7.01% compared with 7.94% rise in the Sensex. The scrip had, however, outperformed the market in past one quarter, rising 23.75% as against Sensex's 19.29% rise.
Shares of Sun Pharmaceuticals Industries (Sun Pharma) had underperformed the market over the past one month till 23 May 2014, sliding 6.61% compared with 7.94% rise in the Sensex. The scrip had also underperformed the market in past one quarter, falling 4.82% as against Sensex's 19.29% rise.
The Andhra Pradesh High Court on Saturday, 24 May 2014, lifted a temporary stay it imposed on generic drugmaker Sun Pharma's proposed takeover of Ranbaxy, paving the way for both companies to complete the deal.
The court last month ordered an interim status quo on the deal, pending a decision on a petition for a probe into alleged insider trading. The petition was filed in late April 2014 by two individuals who requested that the court ask the market regulator Sebi and the two main stock exchanges to halt the deal and order a probe.
Sun Pharma and Ranbaxy lawyers said in court that the insider trading allegations on which the court based its order and the proposed merger are two different issues and the merger process should be allowed to continue, reports suggested.
On 7 April 2014, Sun Pharma and Ranbaxy announced entering into definitive agreements pursuant to which Sun Pharma will acquire 100% of Ranbaxy in an all-stock transaction. Under these agreements, Ranbaxy shareholders will receive 0.8 share of Sun Pharma for each share of Ranbaxy.
The combination of Sun Pharma and Ranbaxy creates the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India. The combined entity will have operations in 65 countries, 47 manufacturing facilities across 5 continents, and a significant platform of specialty and generic products marketed globally, including 629 ANDAs. On a pro forma basis, the combined entity's revenues are estimated at $4.2 billion with EBITDA of $1.2 billion for the twelve month period ended December 31, 2013. The transaction value implies a revenue multiple of 2.2 based on 12 months ended 31 December 2013.
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