Mumbai-based Elder Pharmaceuticals Ltd is to acquire NeutraHealth, a UK-based supplier of vitamins and supplements, for about Rs 70 crore (9.8 million pounds). The price offered by the company is 6.5 pence per share for the issued and to be issued shares, a 20.9% premium to the stock's Wednesday close. Elder holds about 21% stake in NeutraHealth.

Shares of Elder Pharma touched a 52-week high of Rs 434.9 per share during morning trading in BSE on Friday.

Elder Pharma has informed BSE that the company has decided to make a proposal to acquire a company in the Untied Kingdom through its wholly owned subsidiary in Dubai, UAE by way of scheme of arrangement.

NeutraHealth, which sells supplements to Alliance Boots, Tesco and Superdrug, has seen its shares shedding more than half of their value since being listed on the AIM in 2005. The company had posted a 71 percent drop in its latest first-half adjusted pretax profit.

Elder Pharmaceuticals, which is financing the deal by a drawdown under its $18 million loan agreement, will seek further expansion in Europe through the acquisition. Investors representing more than half of the issued share capital in NeutraHealth have already given letters of intent to vote in favour of the recommended offer.

Elder Pharma’s qualified institutional placement (QIP) issue has been opened from Friday with the floor price at Rs 414 per share. Elder is learnt to be looking to raise about $50 million through the QIP.

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