Prime Highlights
- Novartis AG will sell its entire 70.68% stake in Novartis India Ltd to a consortium of investors, opening doors for fresh strategies and growth.
- Shares surged up to 20% to Rs 996.50, reflecting strong investor optimism despite the open offer price being Rs 860.64 per share.
Key Facts
- The stake will be acquired by WaveRise Investments, ChrysCapital Fund X, Two Infinity Partners, ChrysCapital X, LLC, and OceanEdge Investments Limited, totaling 1,74,50,680 shares.
- A mandatory open offer will allow the acquirers to purchase up to 64,19,608 shares (26% of voting capital) at Rs 860.64 per share, with total consideration up to Rs 552.49 crore in cash.
Background
Shares of Novartis India Ltd rallied sharply on Friday after its promoter, Novartis AG, agreed to exit the company by selling its entire 70.68% stake to a consortium of investors. The transaction triggered a mandatory open offer for public shareholders.
The stock rose as much as 20% during the session to hit a high of Rs 996.50 per share. It crossed the Rs 950 mark even though the open offer price was fixed at Rs 860.64 per share, representing a 3.64% premium over Thursday’s closing price of Rs 830.45.
Novartis AG has entered into an agreement to sell 1,74,50,680 shares to WaveRise Investments, ChrysCapital Fund X, and Two Infinity Partners, along with ChrysCapital X, LLC, and OceanEdge Investments Limited. Following the deal, Novartis India said it will remove all references to the seller group from its name within 120 days of the transaction’s completion.
The company’s board approved the execution of a company covenant and warranty deed in connection with the stake sale. Under the agreement, Novartis India has provided customary warranties on a non-recourse basis to the acquirers regarding its business and operations. The company will also extend reasonable support to the buyers in carrying out the mandatory open offer.
Under the open offer, the acquirers plan to purchase up to 64,19,608 fully paid-up equity shares, representing 26% of the voting share capital, at Rs 860.64 per share. The total consideration could reach Rs 552.49 crore, payable in cash, subject to stated terms and conditions.
Novartis India said it will complete all regulatory requirements after the deal. Investors welcomed the exit deal, pushing the stock higher, expecting new strategies under the new owners.