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June 29, 2001
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Money > Business Headlines > Report June 29, 2001 |
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Sebi allows Rs 650 as offer price for German RemediesJanaki Krishnan Shareholders of German Remedies participating in the open offer made by Zydus Cadilla will have to settle for the lower price of Rs 650 per share. This is the stance of the Securities and Exchange Board of India. The capital markets regulator has ruled that it can only regulate the prices of the shares and not the prices of brands and, therefore, only the price of the shares (Rs 650) will be taken as the acquisition price and not the price which includes the valuations of five brands bought by Zydus Cadilla from Asta Medica. This view of Sebi is understood to be in line with its ruling in a previous case involving Spic, sources said. A formal order in this case will be passed by Sebi chairman DR Mehta after he returns from Stockholm. Asta, one of the German parents of GRL, had asked all bidders to submit two bids-one for only the shares and one along with the brands. The bid price along with the brands came to Rs 880 per share. At the Sebi hearing on June 11, the investors (mainly, Universal Medicare) argued in favour of the higher price. However, both Zydus Cadilla and Asta insisted that only the price of the shares should be taken into consideration and the bid price should not include the brands. Zydus Cadilla had bought the brands from Asta for a consideration of Rs 526 million and had contended that German Remedies was just a licensee of the brands and not the actual owner and therefore the value of the brands could not be factored into the acquisition price. The Asta brands were licensed to GRL for a period of two years. The two German firms-Asta Medica and Heller -are each selling 13.7 per cent stake in GRL along with others making a total of 27.72 per cent stake in the company. Zydus Cadilla is making the offer through Recon Healthcare, its wholly owned subsidiary. The open offer was made on April 17, soon after which some of the small shareholders in GRL went to court urging Sebi to look into the matter. Powered by YOU MAY ALSO WANT TO READ:
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