ManagementNovartis may revise open offer Novartis may revise open offer Surajeet Das Gupta & Pb Jayakumar / Mumbai May 28, 2009, 0:44 IST
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Novartis AG was planning to spend about Rs 440 crore for the open offer. The revised offer may require it to spend another Rs 100-120 crore. Its share prices closed at Rs 389.60 today on the Bombay Stock Exchange (BSE), 4 per cent lower than the Rs 405.85 at close of trading yesterday.
Merryl Lynch represents Novartis AG for the open offer, which started on May 20, and is scheduled to close on June 8.
Eric Althoff, spokesperson for Novartis AG, said, “Novartis will not comment on market speculation,” in a telephonic interaction from Switzerland. Novartis India officials declined to comment, too.
The open offer, announced last month, was at a premium of 35 per cent over Novartis India’s average share price during the month. Currently, Novartis AG holds 50.93 per cent in the Rs 560-crore Indian subsidiary, in the news for the past two years for legal fights with the Indian government and patent administration over patent rights for cancer drug Glivac.
Analysts had earlier noted the current open offer was unlikely to be accepted, unless Novartis revised the price. The Indian subsidiary has cash and cash equivalents worth Rs 475 crore, which gives a minimum valuation of over Rs1,000 crore. Novartis also has some of the largest selling brands in the domestic market, like painkiller drug Voveran, they had noted.
Novartis AG has three privately owned companies in India — generic company Sandoz Pvt Ltd, Novartis Healthcare Pvt Ltd and Chiron Behring Vaccines Pvt Ltd.