Torrent Pharma share price sank almost 4% in trade on Friday, falling for the third consecutive session, as reports suggested that the sixth large pharmaceutical player in India was likely to acquire the Hamied family’s stake in Cipla. Shares of the company touched an intraday low of Rs 1,772.05 apiece. The share price of Cipla sank around 1% to hit a low of Rs 1,244.70.
According to the ET NOW report, Torrent Pharma’s promoters are considering placing a bid for Cipla along with a consortium of private equity firms. Additionally, the reports suggested that Torrent Pharma has secured funding from international entities for this purpose. If the Cipla stake acquisition goes through, it might lead to an open offer with a potential transaction value between $6.5-7 billion.
This successful acquisition would elevate Torrent Pharma to the position of the second-largest domestic company in terms of revenue. This would also mean Torrent Pharma would surpass the current market leader, Sun Pharma. Torrent Pharma has approached PE funds, including Warburg Pincus and CVC, with plans to secure approximately $1 billion prior to presenting a binding offer by the beginning of October, according to the report.
In July, reports emerged that Cipla’s promoters were exploring a stake sale with PE firms such as Blackstone and BPEA EQT. YK Hamied, Chairman and MK Hamied, Vice Chairman are over 80 years old and lack a clear succession plan.
After the BSE sought clarification on the news report, Torrent Pharma refused to comment on the claims. In a filing with the exchanges, Torrent Pharma said, “The Company has noted that the news item refers to a potential sale of shares by its promoters pertaining to their involvement in the acquisition of Cipla’s shares. As a policy, the Company does not comment on speculative reports in the absence of verified data.”