Mumbai, Oct. 13: The promoters of Lupin Ltd, Desh Bandhu Gupta and associates, and Newbridge Capital Ltd have called off discussions to sell 12.5 per cent stake in the pharmaceutical company to the latter.
One of the principal reasons for the deal being called off is the sharp appreciation in the share price of Lupin recently.
The price at which Gupta and his associates planned to sell their stake to the Hong-Kong based company was Rs 252 per share, which is a discount of 55 per cent to its closing price of Rs 557.35 at the Bombay Stock Exchange today.
“There is no reason for the promoter to sell his stake at such a low price, particularly when the company's share price is ruling high. Another reason may be the conditions set by Newbridge,” an observer said.
In July, Lupin had announced that 12.55 per cent of its equity was being sold at Rs 252 per share to Newbridge for a total consideration of Rs 127 crore. Newbridge had issued a non-binding letter of intent to the promoters on July 9 declaring its intention to buy about five million shares at Rs 252 per share.