Novartis makes open offer for 39 per cent in Indian arm

Swiss drug maker Novartis AG has made an open offer to acquire an additional stake of up to 39 per cent in its majority-owned Indian subsidiary Novartis India Ltd, from public shareholders at a price of Rs351 per share.

Novartis is seeking to acquire the additional stake at Rs351 ($12.42) per share, a 27 per cent premium to Tuesday's closing price of Rs275.6 per share. The offer represents a total value of about Rs440 crore (or approximately $87 million), the company said in a release.

At Rs351 per share, the offer by Novartis AG, a group subsidiary, represents a premium of 35 per cent over Novartis India Ltd's average share price during the last month.

On successful completion of the offer the Swiss company would raise its stake in the Indian subsidiary to nearly 90 per cent from the current level of 50.9 per cent.

The offer for these shares, which are traded on the Bombay Stock Exchange, is expected to open in May 2009 and is subject to regulatory approvals, the release said.

This, however, is not a formal offer and Novartis said any offers to purchase or solicitation of offers to sell shares of the Indian unit will be made only pursuant to a formal offer by Novartis.  The company has asked shareholders to read the terms of the offer carefully before making any decision. ''Neither the offer to purchase will be made to, nor will tenders pursuant to the offer to purchase be accepted from or on behalf of, holders of shares in any jurisdiction in which making or accepting the offer to purchase would violate that jurisdiction's laws,'' it added.

Novartis is a leading provider of medicines, preventive vaccines, diagnostic tools, cost-saving generic pharmaceuticals, and consumer health products. In 2008, the group reported $41.5 billion in net sales and $8.2 billion in net income from continuing operations.

The Novartis Group, based in Basel, Switzerland, invested approximately $7.2 billion in R&D activities. The group employs about 96,700 full-time-equivalent associates and operate in more than 140 countries around the world.