Drug firm Torrent Pharma has also entered into the fray to acquire Hamied Family’s stake in Cipla, which could be the biggest deal in the pharma sector since 2014, according to a report by The Economic Times.
Surprisingly, Ahmedabad-based Torrent is looking to take control in country’s fourth largest pharma company Cipla, which is more than double its consolidated revenue in FY23, around 2.3 times its revenue and 1.46 times its market value, the report reveals further.
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The competition to buy out Hamied Family’s stake in Cipla includes Blackstone, the largest buyout fund, and Baring PE Asia-EQT.
The drug firm is exploring options of forming a consortium with private equity funds, with advisory support from JP Morgan. According to the ET report, preliminary discussions in this regard have already taken place with few potential partners.
If Torrent’s deal comes to fruition then this acquisition would make it the second biggest pharmaceutical company after Sun Pharma by revenue. If successful, the deal is likely to place Torrent Pharma ahead of Sun Pharma in terms of domestic formulations business.
Sources were quoted as saying that Torrent has talked to multiple lenders for funding and is willing to make an all-cash offer. YK Hamied and MK Hamied, who belong to the second-generation founding family of Cipla, have played important roles within the pharma company over the years.
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The Hamied family, as promoters, holds 33.47% stake in the company. The current market value of Cipla is Rs 98,562.79 crore, up 16.5% in the past month ever since the news of a potential sale surfaced.
According to a Financial Daily report, at this market price, the promoter stake alone is estimated to be valued at Rs 32,988.9 crore ($3.97 billion). Considering the open offer for 26 per cent that has to be held under the takeover rules is fully subscribed, a new owner may end up paying a total Rs 58,615.2 crore ($7.06 billion) for a 59.47% stake.