Court orders temporary halt on Sun Pharma's $3.2 bln takeover of Ranbaxy

MUMBAI Thu May 1, 2014 12:09am IST

A Ranbaxy office building is pictured in Mohali May 14, 2013. REUTERS/Ajay Verma/files

A Ranbaxy office building is pictured in Mohali May 14, 2013.

Credit: Reuters/Ajay Verma/files

Related Topics

Stocks

   

MUMBAI (Reuters) - A court has temporarily halted generic drugmaker Sun Pharmaceutical Industries Ltd's(SUN.NS) $3.2 billion takeover of rival Ranbaxy Laboratories Ltd(RANB.NS) until it decides on a petition for a probe into alleged insider trading.

Last week, two individuals filed the petition in the high court of Andhra Pradesh, requesting the court ask the market regulator and the two main stock exchanges to halt the deal and order the probe. A copy of the petition was seen by Reuters on Wednesday.

The court then ordered an "interim status quo" on the deal and asked all the involved companies, the regulator, and the stock exchanges for details, according to an order dated April 25 and seen by Reuters on the court's website on Wednesday.

Ranbaxy shares jumped 24 percent and trading volume tripled in three sessions ahead of the companies' announcement that Sun Pharma would buy the loss-making company from Japan's Daiichi Sankyo Ltd (4568.T).

The Indian market regulator said this month it was seeking information from Ranbaxy and Sun Pharma on the transaction and would ask for stock exchange trading data after receiving "multiple complaints".

Sun Pharma and Ranbaxy are listed on both the National Stock Exchange and the Bombay Stock Exchange.

Sun Pharma said in a statement the company had not received any communication related to the court order. It also said that it had not violated any rules.

"The matter related to purchase of shares of Ranbaxy Laboratories Ltd does not violate Insider Trading Rules," Sun said, adding it would take "appropriate action" on the petition as advised by its lawyers.

Ranbaxy did not immediately respond to an email requesting comment. A spokesman for the market regulator, the Securities and Exchange Board of India (SEBI), said they had not received the court order and declined to comment further.

Shares in Sun Pharma, India's biggest drugmaker by market value, fell as much as 2.7 percent on Wednesday. The stock ended down 1.04 percent and Ranbaxy fell 2.01 percent, while the Nifty closed 0.3 percent lower.

(Reporting by Devidutta Tripathy and Zeba Siddiqui; additional reporting by Himank Sharma; Writing by Sumeet Chatterjee; Editing by Miral Fahmy)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

REUTERS SHOWCASE

School Shooting

School Shooting

Two killed, four wounded in Washington state school shooting.  Full Article 

Sundar Pichai Elevated

Sundar Pichai Elevated

Google's Pichai to oversee major products and services.  Full Article 

Need For Reforms

Need For Reforms

Euro zone risks "relapse into recession" without structural reforms - Draghi.  Full Article 

Diwali Sales

Diwali Sales

Gold sales jump about 20 pct for Diwali - trade body  Full Article 

World Bank Rival

World Bank Rival

Three major nations absent as China launches W.Bank rival in Asia  Full Article 

Wal-Mart India

Wal-Mart India

Murali Lanka appointed as Wal-Mart India operations chief  Full Article 

Health Of Lenders

Health Of Lenders

25 European banks set to fail health checks - sources.  Full Article 

Special Report

Special Report

Why Madrid's poor fear Goldman Sachs and Blackstone  Full Article 

India Insight

India Insight

Kalki Koechlin on her role as a disabled girl in “Margarita, With a Straw”  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage