India's Cipla puts $215 mln S.Africa bid on hold
NO WORD
Cipla Medpro said it had not received any official word from its Indian affiliate about its decision to suspend talks.
"We have not received any communication from Cipla Ltd about its withdrawal from the talks," Johan du Preez, Cipla Medpro's acting CEO, told Reuters.
Cipla supplies the bulk of Cipla Medpro's drugs under an agreement spearheaded by the South African firm's founder and former CEO, Jerome Smith.
Smith quit last year following board accusations he had taken loans and other financial assistance from his company without proper approval. He is now taking legal action against Cipla Medpro.
There has been speculation Smith's departure could affect the relationship between the two companies. However, one fund manager said the supply agreement would likely remain intact.
"Cipla might have decided that the valuation of Cipla Medpro is now too high, but South Africa is still an attractive market for them and it would make sense to keep the supply agreement even if the deal collapses," Laurie Slatter, a fund manager at 36ONE Asset Management in Johannesburg.
The market for generic drugs - cut-price versions of drugs that are no longer under patent protection - is growing in South Africa as the government aims for a national health insurance scheme heavily reliant on low-cost medicine.
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