GSK Pharmaceuticals soared 18.6 per cent to Rs 2,927.40 on the Bombay Stock Exchange after the drug maker's parent announced a voluntary open offer. London-based GSK Plc said it plans to raise its stake in its Indian unit to 75 per cent from 50.7 per cent at Rs 3,100 per share which is at a premium of nearly 26 per cent compared to Friday's closing price of Rs 2,468.40 on the BSE.
At this price, the potential total value of the transaction is about Rs 6,400 crore. GSK Plc also said it intends to keep the unit listed. Securities regulations in India require listed companies to keep a minimum public shareholding of 25 per cent.
Torrent Pharmaceuticals and Elder Pharmaceuticals had little respite. Both stocks have been slipping since December 13, when Torrent agreed to acquire the branded domestic formulations business of Elder Pharma for Rs 2,004 crore. Torrent Pharmaceuticals fell 1.9 per cent to Rs 470.50 on Monday while Elder slumped 8.6 per cent to Rs 272.70.
Analysts feel Torrent shares dropped probably because traders are trying to realign the price after what they call "an expensive deal", which is four-to-five times Elder's sales.
The deal, however, brings to Torrent a complimentary portfolio led by Elder's leading calcium supplement product Shelcal. So far, as Elder Pharma is concerned, investors need to view the deal in the context of what is left with the company, which has around Rs 1,300 crore in debts.