Brookens news: potential acquisitions of Gland Pharma by Brookfield and EQT, along with IPO announcements from JSW Cement and Captain Fresh make headlines
In a potential significant deal in the pharmaceutical industry, private equity firms Brookfield and EQT are reportedly in advanced discussions to acquire a controlling stake in Hyderabad-based Gland Pharma. The Economic Times reported the news, citing people aware of the development, with other potential buyers including CVC Capital Partners and Warburg Pincus also considering the deal.
Gland Pharma's rising stock price presents a challenge to the acquisition. The company's shares have seen a 10% year-to-date increase and a 16% surge in the past month, reaching a market capitalization of nearly Rs 32,964 crore. This has led to concerns among potential buyers that the stock might be overvalued, making them consider a purchase only at a discount.
The potential acquisition, if successful, could mark a potential shift in ownership for Gland Pharma, a Hyderabad-based pharmaceutical company. Fosun currently owns a 51.8% stake in the company, valued at over Rs 17,141 crore ($1.9 billion). Any change in control would require an open offer for an additional 26% of the shares, potentially making the total acquisition value around Rs 25,711 crore ($3 billion) at current prices.
Industry glut and geopolitical tensions are also factors that could impact the deal. Fosun has to weigh whether selling at a potentially lower price is acceptable amid these macroeconomic challenges.
The terms and conditions of the potential acquisition are not revealed in the report. Other news in the pharmaceutical sector includes Auxano exiting Wiom with strong returns from an early-stage bet, Indira IVF filing for an IPO via a confidential route, and EQT securing $11.4 billion commitments for a new Asia fund.
It is important to note that the acquisition, if successful, has not been officially announced yet. Other active entities in the news include Bain Capital, Warburg Pincus, Whirlpool of India, and Nash Industries. Gupshup also raised $60 million in fresh capital in other industry news.
The rising stock price of Gland Pharma poses a financial challenge for potential buyers, as the current market capitalization is near Rs 32,964 crore, causing concerns that the stock might be overvalued.
Should the potential acquisition of Gland Pharma by Brookfield and EQT, among others, be successful, the total acquisition value could reach approximately Rs 25,711 crore ($3 billion), assuming an open offer for an additional 26% of shares is required.
