A FRESH round of battle has begun between Japanâ€™s Daiichi Sankyo and Hyderabad-based Zenotech Laboratories with the company law board (CLB) issuing a notice to Zenotech managing director for â€˜mismanagementâ€™.
A person close to Daiichi Sankyo said the CLB has issued a notice to Jayaram Chigurapati, Zenotechâ€™s promoter & MD after Ranbaxy filed a case against Dr Chigurapati for â€œneglecting Zenotech affairs and putting his personal interest ahead of the companyâ€™s.â€ Despite repeated attempts, Dr Chigurapati could not be for his comments at the time of going to the press. This development comes after Zenotech was asked to put on hold its scheduled board meeting on October 9, after Daiichi Sankyo, in a separate appeal, opposed the appointment of two directors as proposed by Mr Chigurapati.
Meanwhile, minority shareholders of the public listed company appealed to the Securities Appellate Board (SAT) to ask Daiichi Sankyo to increase its open offer price by an additional Rs 10-11 to Rs 170.
A few days back, SAT asked Daiichi Sankyo to hike its open offer price to Rs 160 from Rs 113. Daiichi Sankyo first made the open offer in January at Rs 113.62 per share. Following the news of the SATâ€™s ruling to hike the open offer price by about 40%, the shares of Zenotech had touched a 52-week high of Rs 138 last week. The two companies have been in a tussle for about a year now over the open offer price.
The Japanese company is making the open offer because it inherited an indirect ownership in Zenotech after it bought a 64% stake in Ranbaxy last year. Ranbaxy in turn holds 47% stake in Zenotech. As per market regulator Securities and Exchange Board of Indiaâ€™s (Sebi) takeover norms, if there is a change in control of promoter group of a listed firm, the acquirer has to make a compulsory open offer to acquire at least 20% stake from the companyâ€™s shareholders.
SAT today heard Zenotech minority shareholderâ€™s appeal to include the interest cost of Rs 11 in the open offer price. The next round of hearing is scheduled for November 6. This effectively means the Japanese companyâ€™s open offer to buy an additional 20% stake in Zenotech will not happen till the first week of November before the price is decided by the SAT.
A minority shareholder of Zenotech, on the condition of anonymity, said the biotech company has sought an annual interest of 10% for the delay in the open offer which works out to be about Rs 11.
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