Piramal Healthcare to buy back up to 20-per cent equity at Rs600 per share
23 October 2010
Piramal Healthcare Limited which completed the sale of stake in its domestic formulations business and its shareholding in Piramal Diagnostic Services Pvt Ltd on Friday proposed a buyback of 20 per cent of its outstanding shares at Rs600 apiece as a measure of rewarding shareholders.
At its meeting on Friday, the board of directors of Piramal Healthcare approved the buy-back of equity shares subject to the approval of shareholders, and such other approvals / consents, as may be necessary.
The board opted for the share buy-back as it was more tax efficient compared with the other alternatives such as dividend and/or bonus issue, a company release said.
The company has proposed to buy back a maximum of 41.8 million shares (about 20 per cent of the total) at a price of Rs600 per equity share, a 19-per cent premium to the average share price for the last three months.
The buyback, estimated to cost Rs2,510 crore, will be completed by February 2011.
The buy-back will be done on a proportionate basis through the "tender offer" route as prescribed under the Securities and Exchange Board of India (Buy-Back of Securities) Regulations, 1998 in accordance with the provisions of the Companies Act, 1956 and the buy-back regulations, the company said in its release.