Cipla moves to buy SA's Cipla Medpro
In a filing to the BSE, Cipla said it is "in preliminary discussions and has made an indicative proposal in relation to the acquisition of an approximately 51 per cent stake in Cipla Medpro South Africa Ltd".
The company has offered a rate of 8.55 rand per share, it added.
Shares of Cipla today jumped 2.61 per cent to close at Rs 389.70 apiece on the BSE, becoming the biggest gainer among 30 Sensex stocks.
"Based on Cipla Medpro's current shares outstanding and sport ZAR/USD exchange rates, total consideration payable by the company would be approximately USD 220 million (exclusive of the anticipated dividend of up to ZAR 0.10 per share to be paid by Cipla Medpro to its shareholders for the 2012 financial year)," the company said.
Stating that the ongoing discussions are subject to various conditions, Cipla further said: "At this stage, there is no certainty that these discussions will lead to a firm
offer being made or a transaction being consummated."
Cipla Medpro is a distributor of the Indian firm's products in South Africa and certain neighbouring markets.
Last month, Cipla Medpro had said its Chief Executive Jerome Smith has resigned citing "an irretrievable breakdown in the working relationship with the Board and alleging that he was forced to resign. He also indicated that he would
institute legal action to claim damages..."
Smith had established Medpro