Torrent promoters were likely to bid for Cipla, along with a consortium of private equity firms, the report said adding that Torrent Pharma has lined up debt from foreign funds.
Torrent promoters were likely to bid for Cipla, along with a consortium of private equity firms, the report said adding that Torrent Pharma has lined up debt from foreign funds.Shares of Ahmedabad-based Torrent Pharmaceuticals Ltd (Torrent Pharma) and Mumbai-headquartered Cipla Ltd were trading flattish in Friday's trade after stock exchanges sought clarification from the former with reference to news appeared in ET NOW dated August 31 suggesting the drug maker is in talks to acquire Cipla.
As per the ET NOW report, Torrent promoters were likely to bid for Cipla, along with a consortium of private equity firms, adding that Torrent Pharma has lined up debt from foreign funds. Cipla's stake could trigger an open offer which would imply a cheque size of $6.5-7 billion, the report suggested. A successful deal will take Torrent Pharma to the second-largest company by revenues in India. In domestic formulation business, it will overtake market leader Sun Pharma. Cipla's revenue in financial year 2023 is more than double that of Torrent Pharma.
Shares of Torrent Pharma were trading 0.18 per cent lower at Rs 1,840.25 on BSE. Cipla shares were up 0.22 per cent at Rs 1,260.
In India, Torrent is ranked number six in the Indian pharmaceutical market with a share of 3.6 per cent and Cipla is number four with a share of 5.1 per cent, as per MAT July 2023, according to market research firm AWACS.
Torrent Pharma is cranking up its efforts to put together financing to buy out the promoter family of Cipla, The Economic Times suggested quoting several people with knowledge of the matter. This would be the largest pharma sector acquisition in the country till date, the report said adding that the acquisition would include a likely Rs 8,300 crore ($1 billion) equity infusion from one or more private equity players.
As per the ET report, rival contenders Blackstone, Baring Asia hit pause mode as Cipla valuations soared. Torrent Pharma has tapped PE funds such as Warburg Pincus, CVC among others to raise around $1 billion before submitting binding offer by early October, the report suggested.
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