Daiichi defers open offer for Ranbaxy

Delay in Sebi approval prompts move.

 Japanese drug major Daiichi Sankyo today deferred its proposed open offer to acquire an additional 20 per cent stake in Ranbaxy Laboratories, citing a delay in approvals from market regulator Securities & Exchange Board of India (Sebi).

In a communication to the Bombay Stock Exchange (BSE) today, ICICI Securities, which is managing the open offer on behalf of Daiichi Sankyo, said a new date would be announced later. "The revised schedule of activities will be announced separately after receiving Sebi's observations," said the announcement.

The open offer was scheduled to start on August 8 and close on August 27, as per an announcement on June 16. A Ranbaxy spokesperson said the deal is on track and the terms and conditions announced earlier would remain the same. "The delay in the open offer is procedural in nature. The revised date of open offer will be communicated soon", he said.

Under the rules, Sebi is supposed to get back within 21 days of the open offer application. When contacted, Sebi sources said it will approve the issue after some "procedural queries" are sorted out.

ICICI Securities said the draft Letter of Offer was submitted to the market regulator on June 27, 2008 as per the regulations and was awaiting approval from the regulator. The proposal is to acquire up to 92,519,126 equity shares of a face value of Rs 5 each from the non-promoter shareholders of Ranbaxy, at a target price of Rs 737.

The announcement comes at a time when Ranbaxy has been in the news for alleged irregularities in complying with the United States Food and Drug Administration norms.

Ranbaxy's promoters, Malvinder Singh and his family, had decided on June 11 to sell off their 34.6 per cent stake in the company to the Japanese drug major in a deal valued about Rs.10,000 crore. Daiichi had said it would follow up with an open offer to acquire a further 20 per cent stake in Ranbaxy and its subsidiary Zenotech