Kolkata-based consumer products maker Emami Ltd has announced an agreement with the Parikhs of Zandu Pharmaceuticals Works Ltd to buy their 18.8% stake in the company. Parikhs and Vaidyas were the two promoter groups in Zandu, and Vaidyas had already sold their stake to Zandu in May this year. Parikhs were against the takeover bid of Zandu, but now seem to have caved in to Emami's revised offer. Emami will pay existing promoters of Zandu and their relatives, friends and associates a total of Rs 16,500 per share, which comprises of Rs 1,500 as non-compete fee. The total size of the deal works out to be Rs 242 crore, and the non-compete fees is Rs 22 crore.
Emami, which till now had 27% stake in Zandu, now has a majority control over the company with a 50.25% stake. In addition to buying stake controlled by Parikh's, it has also acquired 4.64% stake through open market bulk deals.
Emami had bought the 24% stake of Vaidya's, the other promoter family in Zandu, in May this year, at a price of Rs 6,900 per share amounting to Rs 130 crore. This also includes a non-compete clause of Rs 100. Emami had bought 3% stake earlier from some other shareholders.
After Emami's acquisition Vaidya's stake, the stock price of Zandu shot through the roof, reaching a high of Rs 24,643. Emami initially announced the open offer for 20% stake in Zandu at a share price of Rs 7,315, and then revised it twice to go up to Rs 16,500 per share.