Sources close to the deal indicated that the shortlisted bidders, are "not disliked" by Schering AG and Boehringer Ingelheim, though "parallel" talks would be vital to ensure continuity in the brand licensing arrangement.

Schering AG and Boehringer Ingelheim control 4.6 per cent each of German Remedies equity capital, while Degussa Huls, which holds a 27.72 per cent stake in German Remedies through Asta Medica AG and Heller AG, had earlier decided to divest its interest in company.

The four shortlisted bidders are believed to include Ranbaxy Laboratories, the Piramal group and Pharmacia & Upjohn, though the Piramals are seen as the front-runner with an offer price in the range of Rs 500 to Rs 770 per share. No official statement could, however, be got from the companies involved.

Analysts add that given the prevailing market price of around Rs 600 per share, it is logical to assume a fair price of Rs 475 to Rs 500 per share for a controlling interest in GR.

Though analysts expect both Schering and Boehringer to eventually exercise their exit option, sources say that as a general strategy, both players do not retain majority interest in several emerging markets including Korea and Thailand. "The Piramals do not really need to buy out Schering and Boehringer. Once a deal is struck with Degussa and followed up with an open offer, they can use the creeping acquisition route to up their stake in GR.

Rhone-Poulenc India's borrowing power is likely to play a significant role in the deal," analysts said.

A report by Mehta Partners LLC had earlier reportedly pegged the enterprise value of German Remedies at Rs 780 crore or Rs 950 per share. German Remedies has a paid up equity capital of Rs 8.2 crore. German Remedies has products in segments like oncology, respiratory, cardiovascular and gastroenterology segments.