Daiichi Sankyo, which acquired majority stake in Ranbaxy in November 2008, has made an open offer to buy 20% stake in Hyderabad-based Zenotech Labs. However this has now run into controversy as Zenotech managing director and former promoter Jayaram Chigurupati has said the open offer price of Rs 113.62 is unacceptable and the Japanese company is going back on its agreed price of Rs 160/share. In a letter to the market regulator, Chigurupati who still owns 25% of Zenotech, called upon SEBI to review the issue.

Earlier in the day Daiichi announced the open offer for Zenotech. ICICI Securities on behalf of Daiichi said the Japanese firm will acquire upto 68.85 lakh shares of Zenotech representing 20% equity at a price of Rs 113.62/share. The offer opens on March 13 and closes on April 01, 2009.

This followed the change in promoter group in Ranbaxy. Ranbaxy owns 47% in public listed Zenotech (it acquired 45% from the open market and from the promoter family led by Chigurupati in 2007 and came up with an open offer in January 2008 and now holds 47%). Following Daiichi's acquisition of Ranbaxy which was completed in November 2008, the Japanese company indirectly acquired Ranbaxy's stake in Zenotech. As per Indian laws, Daiichi has to make a mandatory open offer to buy 20% stake from public shareholders due to change in promoter group of Ranbaxy.

According to this report, Daiichi has denied any agreement to make an open offer at Rs 160 as claimed by Chigurupati: "We have no plan to change the offer price, Rs 113.62. The public announcement made by Daiichi Sankyo is in order to comply with the provisions of the applicable SEBI rules and regulations and hence we have nothing further to comment on this matter."

Chigurupati has said: "We reject the new price. And we have written separate letters to Daiichi Board and SEBI." Zenotech had last year moved the Andhra Pradesh High Court opposing the acquisition of Ranbaxy by Daiichi Sankyo in July last year.

Chigurupati claimed that it withdrew the complaint after Daiichi Sankyo agreed to pay Rs 160 per share for the open offer to Zenotech shareholders. "As a result, two lawsuits filed by Zenotech shareholders to stay Daiichi's acquisition of Ranbaxy were withdrawn. Since then, the agreement to pay Rs 160 was confirmed in August, 2008 and in a meeting in Oberoi(Delhi) on November, 2008. In fact, this was the agreement until the midnight of January 15, 2009. For reasons best know to Daiichi, the offer was withdrawn at the very last minute," Chigurupati said in a press statement.

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