Torrent Pharma joins race to acquire Hamied family stake in Cipla

Pharmaceutical company Torrent Pharma has entered the fray to acquire the Hamied family stake in Cipla in what could be the biggest pharmaceutical deal since 2014. (2.3x) combined revenue in fiscal 2023, 2.3 times earnings and 1.46 times current market value, according to a report. More importantly, the Hamied family’s competition to buy Cipla shares also includes Blackstone, the largest buyout fund, and Baring PE Asia-EQT. Torrent Pharma, with consulting support from JP Morgan, is exploring opportunities to form a consortium with private equity funds. The Economic Times reported that preliminary discussions on the matter have taken place with a number of potential partners. Main actor

If the Torrent deal is successful, it will eventually lead to the creation of India’s second-largest pharmaceutical company after Sun Pharma in terms of revenue.
Torrent has spoken to several lenders for funding and is willing to make a cash offer. The Financial Daily said, citing sources that the work had gained momentum over the past month. A successful transaction could put Torrent Pharma ahead of Sun Pharma in the domestic formulation sector.
YK Hamied and MK Hamied, both in their 80s, represent the second generation in the founding family of Cipla. While YK Hamied has no children, MK Hamied has three, holding various roles at the pharmaceutical giant over the years. In 2015, Son Kamil left the company to pursue another hobby. His daughter, Samina Hamied, currently serves as an executive vice president, overseeing the company’s affairs but has not been actively involved in an executive role. Romania Hamied has previously participated in CSR (Corporate Social Responsibility) activities. According to the report, emerging real estate issues and recent tax sweeps are believed to have played a key role in the family’s decision to consider selling their entire stake in the business. . Related parties

The family, as founders, holds 33.47% of the company’s capital. Cipla’s current market value is Rs 98,562.79 crore, up 16.5% last month since news of a potential acquisition. At this market price, the developer’s share alone is estimated at Rs 32,988.9 crore ($3.97 billion). The Financial Daily said that, considering that the 26% open offering must be owned under a fully registered takeover rule, new owners could have to pay a total of Rs 58,615.2 crore (7, 6). 06 billion USD) for a 59.47% stake. The Sudhir and Samir Mehta family, who own Torrent, have a substantial 71.25% stake in the company and this substantial ownership gives them the ability to dilute equity to increase leverage. A person familiar with the matter told the publication: “With the current market capitalization, the company can raise around Rs 26,000 crore but the promoters will continue to hold around 51% of the shares.” .