Cipla promoters said to explore stake sale to Blackstone, Baring Asia
Sources also suggest that an investment bank has been hired to advise on the deal and PE firms like Blackstone, Baring Asia among others are in talks to explore a deal. This move comes as a step towards succession planning for the company, they added.
Cipla’s market capitalisation is over $10 billion, a 25 percent stake sale will require a large investment of over $2.5 billion, sources said
Cipla promoters said to explore stake sale to Blackstone, Baring Asia
Sources also suggest that an investment bank has been hired to advise on the deal and PE firms like Blackstone, Baring Asia among others are in talks to explore a deal. This move comes as a step towards succession planning for the company, they added.
A source also added that the promoters are “well-coordinated” and have been taking active role in the company’s operations. “Succession issue has been a long standing concern at Cipla, company needs a clear leadership plan. It has been often seen as a takeover candidate for this reason,” one of the sources shared.
With Cipla’s market capitalisation being over $10 billion, a 25 percent stake sale will require a large investment of over $2.5 billion, sources said adding that PE firms are trying to stitch together a consortium of investors to fund the large deal for a bigger chunk of the stake on offer. A source also said that pharma is a sector of choice and any opportunity in the sector is attractive for private equity, especially, after the success of KKR’s bet on JB Chemicals.
Meanwhile, shares of Cipla on July 27 traded at day’s high to nearly 10 percent at Rs 1,171.70 apiece on BSE at the time of publishing the story.
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