This is the start of a much larger game

11 June 2008

Malvinder Singh, MD and CEO, Ranbaxy, has said that Ranbaxy is well positioned to capitalise on opportunities in the generics space and the company had various options to, but Daiichi was the best. Takashi Shoda, president and CEO, Daiichi Sankyo said he would like the company to grow with Ranbaxy both organically and inorganically.

CNBC-TV18 shares with domain-b its exclusive interview with Malvinder Singh and Takashi Shoda

Could you speak on behalf of Daiichi Sankyo and tell us whether their end game is to only stop at more than 50 per cent  when they get a majority stake? Will they continue to mop up stake in the secondary market to bolster their stake even post-open offer?
Singh: It is to get 50.1 per cent.(See: Japan's Daiichi Sankyo to acquire majority stake in Ranbaxy)

 If they get the entire 20 per cent  in the open offer, would they accept the entire 20 per cent ?
Singh: We will have to see what happens. Let us not get into presumptive games. There is the promoter shareholding, which will get sold at Rs737. There is an open offer, which is up to 20 per cent, which will also happen at Rs737. Then, there is a preferential allotment of shares and of warrants, which will also happen at Rs737.

So, the money will come to promoters, the open offer money will go to shareholders and the preferential allotment and the warrants money will come into the company, which will be around a billion dollars.

Is it true that you spoke to some other players as well for a possibility of this stake sale? Were other large global company like GSK in the frame as well?
Singh: I am not going to give any names. But yes, we certainly had various options but I believe this is the best option and this is the best transaction that we had.

Have some of the large domestic institutional investors been taken on board with this decision. Have you any idea what they might do with their stake because the holdings that some of them have in Ranbaxy is sizeable?
Singh: I think the value that every shareholder will get will be very substantial. Over the average last three months of share price, this is a more than 50 per cent  increase. The Ranbaxy share has been trading within a defined band over the last many years and this is a very substantial jump where the market capitalisation of the company becomes $8.5 billion. So every single shareholder in Ranbaxy will be very handsomely rewarded.