Cipla's proposed stake sale is hampered by promoter disagreement over valuation: Report

9 Oct 2023 , 02:12 AM

The expected Cipla stake sale plan has encountered a difficult obstacle since, according to reports, the promoters are not in agreement on the common valuation.

According to ET Now, which cited unnamed sources, disagreements among the founders could cause a delay in the transaction until an agreement on the valuation is reached.

Currently, the promoter group of Cipla owns about 33% of the company’s shares. According to reports, the family members may decide to sell all or a portion of their shares in Cipla.

According to ET Now, the promoter group, which owns 8% of the corporation, has differing opinions on various matters.

An open bid for an additional 26% of the business would result from a sell-out, which means the new owner may end up controlling as much as 59.4% of Cipla, surpassing Sun Pharma’s $4 billion acquisition of Ranbaxy from Daichii in 2014.

The market value of Cipla was around Rs 1 lakh crore as of mid-September. The promoter interest alone was worth Rs 33,389 crore ($4.02 billion) at this price.

At 2:10 PM on the BSE, Cipla shares were down 0.55%, trading at Rs 1,156.65 per share.

The most recent development comes after Bloomberg previously reported that the sale of a stake in Cipla Ltd. may not go through because potential buyers are wary of the $13.1 billion valuation that the company’s founding family members are seeking in the transaction, according to sources familiar with the matter.

Earlier, ET had reported that Cipla was working with an advisor and in contact with four to five sizable PE groups, the majority of which are seeking to buy out the promoter interest completely.

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