Novartis ups offer price for Indian arm to Rs450 per share

Swiss drug giant Novartis AG today announced an increase in its offer price for Novartis India Ltd to Rs450 ($15.9) per share, from the Rs351 initially proposed.

Novartis AG was forced to raise the offer price as Novartis India shares were ruling above the open offer price of Rs351 at the time when the offer was announced. The shares closed at Rs389.60 today on the Bombay Stock Exchange (BSE), 4 per cent lower than the Rs405.85 at the close of trading yesterday.

Novartis AG was planning to spend about Rs440 crore for the open offer. The revised offer may require it to spend another Rs100-120 crore or a total of Rs560 crore (around $111 million at current exchange rates).

The Swiss company proposes to increase its stake in the Indian subsidiary to 90 per cent from the previous 51 per cent.

The revised offer represents a premium of 63 per cent to the closing share price of Rs275.6 of Novartis India Ltd on 24 March, which was the last trading day before announcement of the offer, the company said in a release. (See: Novartis's open offer for Indian arm to begin on 14 May) 

"This proposal represents Novartis' only and final price revision to this offer, as May 28 is the last day on which the price can be revised," the release said.