[Ip-health] Ranbaxy shares slump 23% in 2 days

[Eleanor Blume]

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[ Picked text/plain from multipart/alternative ]
 Trouble for Ranbaxy, though all recent reports indicate that the
Ranbaxy-Daiichi deal is binding. EMB


http://www.blonnet.com/2008/07/16/stories/2008071652131400.htm

The Hindu Business Line
*Ranbaxy shares slump 23% in 2 days**
Our Bureau
Mumbai, July 15
*

 Ranbaxy Laboratories shares slumped for the second consecutive day, down 14
per cent on Tuesday, amidst concerns of action from the United States
Department of Justice (DoJ). Ranbaxy had come in for the stick from the DoJ
regarding two of its manufacturing units in India, audit-related details on
them and generic products sold by them.

The company's stock closed at Rs 409 on the BSE and NSE. The development
comes close on the heels of Ranbaxy promoters agreeing to sell their entire
stake to Japan's Daiichi Sankyo.

Meanwhile, shareholders of Ranbaxy Laboratories today approved allotment of
over seven crore securities on preferential basis to Daiichi Sankyo. The
shareholders of the company at the extra ordinary general meeting (EGM) held
today approved the allotment of 4.6 crores equity shares and 2.3 crore
warrants to Daiichi Sankyo at a price of Rs 737 each on preferential basis,
the company informed the exchanges.
 Heavy weight

In fact, the stock took a beating for two consecutive days after the
developments broke out of the US, on concerns that the Daiichi-Ranbaxy
agreement could come under a cloud.

It had fallen by 10.45 per cent on the BSE on Monday as well. Both companies
have, however, gone on record to state that the agreement is binding.
Ranbaxy's stock has lost the gains that it had gathered since the Daiichi
Sankyo deal was struck. In fact, Daiichi's open offer for Ranbaxy's shares,
at Rs 737 per share, was to commence early next month.

The stock has plummeted by Rs 122 or 23 per cent on the BSE in the last two
trading sessions as against a closing price of Rs 531.45 recorded on Friday,
July 11. Being a heavy weight, Ranbaxy also contributed to a sharp dip in
the BSE Healthcare index by 4.18 per cent on Tuesday.

The combined BSE-NSE turnover on the Ranbaxy counter doubled to Rs 1,359.28
crore to what it was on Monday (Rs 661 crore). On Friday, the combined
turnover was just around Rs 65 crore.
 Ranbaxy response

Meanwhile, Ranbaxy has filed its response in the US District Court for The
District of Maryland, defending itself and agreeing to share the data that
was demanded of it.

Pharma industry representatives are, however, concerned on the ramifications
of Ranbaxy coming under the scanner of the US regulatory authority. All
generic exports from the country's drug-makers would now be viewed with some
suspicion, said a worried industry official. All pharma stocks closed in the
red, including Zydus Cadila and Cipla, among others.