The Hinduja group's top brass, in response to a faxed query, said, "A lot of people have approached us, including Novartis, but we have not finalised anything." The asking price is believed to be in the range of Rs 300-400 plus per share, though Hinduja officials said that the proposed deal was at "no such stage". A Novartis spokesperson maintained that the company did not wish to comment on market rumours and denied that any deal had been reached.

The Astra-IDL scrip had moved up to around Rs 350 last week in anticipation of an announcement of an equity deal. The scrip had only sellers on Tuesday and closed at Rs 282 on the NSE, a drop of 5.68 per cent over the previous day'sclose.

Industry sources, however, claim that Astra's conditional-exit plans, which stipulate that its brands will have to be returned after six years, could serve as a stumbling block for the deal. "Most firms would not want to promote these brands, knowing well that at the end of it, they will be returned," sources say. Hinduja officials, however, maintained that this was done only to ensure that the transition was made smooth.

Analysts also say that it is unclear whether the Hindujas themselves were keen on a long-term presence in the pharma business, though group officials denied that any exit plan was in the offing.

Meanwhile, Hinduja officials said that the group was "in the process of finalising" the buyout of Astra's holding in the joint-venture company. Astra IDL is jointly controlled by the Swedish giant and the IDL group of the Hindujas, with both partners holding 25.75 per cent each of the company's equity. IDL holds the first right of refusal.

Industry sources say that Astra and IDL had,at one time, more-or-less arrived at a price range of Rs 250-300 per share for transfer of the former's holding to IDL, though there is no official confirmation on this.

Astra had, last year, in a communication to the SEBI, disclosed its intent to withdraw from Astra IDL in a phased manner. The company's products are essentially concentrated in the cardiovascular, anaesthetics and respiratory segments and key brands include Pulmicort, Bicanyl and Imdur. Astra, however, has a wholly-owned research facility at Bangalore.

Astra's exit plans comes at a time when it has announced global merger plans with British giant Zeneca Plc. Zeneca shareholders will hold 53.5 per cent and Astra shareholders 46.5 per cent in AstraZeneca. The combine boasts of a market capitalisation of $67 billion.

INSIGHT

Shareholders stand to gain

Since the time the Hindujas have announced that they would like to sell their stake in Astra IDL, the stock has been speculators' favourite. The scrip has doubled fromRs 180 in November 1998 to Rs 357 in December 1998. There is little in the performance of the company to justify such a rise.

However, after that there seems to be little happening in the stock, and in fact inspite of a boom in pharmaceutical stocks, Astra IDL has shown a downward movement and has closed at Rs 287 on Tuesday. The buyout by Novartis if it comes through will be a boon for Astra IDL shareholders, which will give them an excellent exit opportunity.