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Cipla Proposes To Acquire 51% Stake In Cipla Medpro South Africa

11/21/2012 5:18 AM ET

Cipla Ltd. said it was in preliminary discussions and had made an indicative proposal for the acquisition of around 51 percent equity stake in Cipla Medpro South Africa Ltd., a company incorporated in the Republic of South Africa and listed on the JSE Ltd., at a price of ZAR 8.55 per share (payable ex the final dividend for the 2012 financial year, which will be capped at a maximum ZAR 0.10 per share).

Based on Cipla Medpro's current shares outstanding and spot ZAR/$ exchange rates, total consideration payable by the company would be around $220 million (excluding the anticipated dividend of up to ZAR 0.10 apiece to be paid by Cipla Medpro to its shareholders for the 2012 financial year).

This discussions are subject to various conditions, including finalization of due diligence, execution of definitive documentation, applicable board, regulatory and other approvals.

At this stage, there is no certainty that these discussions will lead to a firm offer being made or a transaction being consummated, the company said.

Cipla Medpro is a distributor of the company's products in South Africa and certain neighboring countries.

At the BSE, Cipla closed Wednesday's trading at Rs.389.70, up 2.61 percent from the previous close.

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by RTT Staff Writer

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