Drugmaker Gland Pharma’s shares surged over 7% to Rs 1,869 on Tuesday on report that said China’s Shanghai Fosun Pharmaceutical Group Co Ltd is considering a sale of the firm.
The Chinese firm has been working with an adviser, while companies in the industry and buyout firms are in the early stages of studying the business, according to a Bloomberg report. Fosun holds a 57.86% stake in Gland Pharma.
Fosun is yet to initiate a formal sale process of its stake in Gland Pharma, the report added. In a stock exchange filing, Gland Pharma Limited clarified on Tuesday that the company is not aware of its promoters – Fosun Pharma and / or its Parent, Fosun International – is considering sale of shares of the company.
Shares of the drugmaker surged as much as 8.7% on the report, their biggest intraday gain since July 2021.
Fosun Pharma’s debt-laden parent, Fosun International Ltd, which was once one of China’s most acquisitive dealmakers, has done a series of stake reductions and sales this year, reported Reuters on Tuesday.
As of last close, Gland Pharma shares were down 54.8% for the year, giving it a market value of about $3.5 billion. The stock is up just 2.1% since it listed in November 2020.
The Bloomberg report also said that Fosun Pharma’s high valuation expectations could pose a potential hurdle to any potential deal amid a tough financing environment as the interest rates are on the rise globally. It hasn’t kicked off a formal sale process, and there’s no certainty the deliberations will lead to a transaction, Bloomberg reported quoting sources.
Fosun Pharma acquired a 74% stake in Gland for about $1.1 billion in 2017 from an investor group including KKR & Co. It listed the business three years later in an $873 million initial public offering in Mumbai, according to data compiled by Bloomberg.
