Novartis AG, the promoter of Novartis India, has entered into a share purchase agreement worth Rs 1,445.89 crore to sell its entire stake of 70.68% in the company. The buyers comprise 3 marquee names including WaveRise Investments, ChrysCapital Fund X and Two Infinity Partners.
Under the agreement, the Swiss pharma maker will sell over 1.74 crore fully paid equity shares of the company. Pursuant to this, the company will change its name to remove all references to the seller group within 120 days from the completion of the transaction.
Novartis India: Mandatory Open Offer Announced
Following the acquisition, the buyer group, along with their persons acting in concert (PACs), ChrysCapital X (PAC 1) and OceanEdge Investments (PAC 2), has announced a mandatory open offer for Novartis India.
Via the open offer, the buyers will acquire up to 26% of the company, with the offer price of Rs 860.64 per equity share, valuing the offer at approximately Rs 552 crore. The open offer price is at a significant discount to the current levels.
The acquirers will purchase over 64.19 lakh fully paid-up equity shares (each with a face value of Rs 5) from the public shareholders of the company.
The open offer is being managed by Axis Capital.
Novartis India: Acquisition Details
According to the company’s regulatory filing, WaveRise Investments shall acquire over 1.39 crore equity shares of the company, representing a stake of 56.45% at Rs 860.64 per share.
Acquirer 2, ChrysCapital Fund X, will buy over 25.47 lakh shares. This represents about 10.32% of the company at Rs 701.25 per share. Two Infinity Partners, the third acquirer, shall purchase over 9.65 lakh equity shares of the company at Rs 701.25 per share. This represents about 3.91% of the company.
Novartis India: Post-Offer Shareholding
Following the completion of the open offer, the new promoter group and their PACs will hold a significantly larger stake in the company. If the full 26% open offer is subscribed, the acquirer group will own 96.68% of the company.
If the full offer is subscribed, WaveRise Investments will hold a stake of 72.78% in the company, followed by ChrysCapital Fund X, which will hold a stake of 17.33%. Two Infinity Partners would hold a stake of 6.57%, if the full offer is subscribed.
Share price: Novartis India
Following the announcement, the pharma company’s share price was up 20% in the morning session. Over the past one month, the company’s stock has delivered a return of over 27%, while over the past one year, the company’s stock has delivered a return of 19%