Report on Pfizer move buoys Ranbaxy stock to a 3-year high

13 June 2008

Mumbai: Ranbaxy Laboratories Ltd, India's biggest drugmaker, rose as much as 5.6 per cent, the highest in more than three years, following reports that Pfizer Inc may make a hostile bid, trumping an agreed $4.6 billion buy-out by Japan's Daiichi Sankyo Co.

Ranbaxy Laboratories closed 4.3 per cent (Rs23.10) higher, at  Rs567.15, on the Bombay Stock Exchange (BSE).

Pfizer, the world's largest drugmaker, may offer to buy the outstanding 65 per cent of Ranbaxy that is mostly held by financial institutions, reports said.

Financial institutions hold 41.28 per cent stake in the company, with insurance companies holding a total of 19.88 per cent of which LIC alone holds 15.84 per cent. Foreign institutional investors (FIIs) hold 17.95 per cent stake, while the public holding is 21.24 per cent. 

An acquisition of Ranbaxy would help Pfizer gain control of the generic version of its largest selling patented drug, Lipitor. The anti-cholesterol drug has around $12 billion annual sales.

Ranbaxy is scheduled to launch a generic version of Lipitor in the United States in less than two years. It has the right to sell its generic version of Lipitor for 180 days, from March 2010.