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Cadila's open offer for German Remedies approved

India's stock market regulator has cleared Cadila Healthcare Limited's open offer to buy a 20 per cent stake at Rs 650 a share in German Remedies Limited, Cadila said in a statement Friday.

Cadila, which acquired a 27.72 per cent stake in German Remedies from Asta Medica AG and Heller AG in May, had to delay the open offer after small shareholders opposed the offer price in a petition to the Securities and Exchange Board of India.

Sebi said the price of Rs 650 a share paid by Recon Healthcare Limited, a subsidiary of Cadila, to Asta Medica "was the correct negotiated price under Sebi's rules of acquisitions and takeovers," the Cadila statement said.

Shareholders who challenged Cadila's open offer price had argued the pricing should have taken into account Rs 525.5 million paid by Cadila to Asta Medica for acquiring perpetual rights to five drug brands in addition to Rs 1.48 billion paid for acquiring a 27.72 per cent stake in German Remedies.

"The Sebi order confirms the acquisition of German Remedies was a fair transaction and the interests of minority shareholders have been protected," Cadila managing director Pankaj Patel said in the statement.

A Cadila spokesman said that the company was likely to send the open offer letter to shareholders next week and the offer would be open from July 20 for a month. DSP Merrill Lynch will be the manager for the open offer, the statement said.

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