Selloff dose

Mumbai, March 22: Vijay Mallya is exiting Aventis Pharma, the Rs 1,085-crore company whose major shareholders include Sanofi-Aventis and Hoechst GmbH.

The UB group is selling its 10.27 per cent stake in the company to the two overseas promoters for a little over Rs 414 crore.

Aventis Pharma today said its promoter Hoechst would raise its stake in the company to 60.37 per cent in the firm by acquiring Mallya’s holding.

Hoechst plans to acquire shares from Kingfisher Finvest, United Breweries (Holdings), McDowell Holdings and Mallya Private Ltd at Rs 1,750 per share.

The UB group has had a long association with Aventis. Vittal Mallya joined hands in the late 1950s with Hoechst AG of Germany to co-promote Hoechst Pharmaceuticals or Aventis Pharma India.

Aventis Pharma said Hoechst, the 100 per cent subsidiary of Sanofi-Aventis, had decided to increase its equity shareholding in the company by offering to purchase 2,366,380 shares representing 10.27 per cent of its share capital.

The notice added that the offer satisfied all the tests prescribed under the Substantial Acquisition of Shares and Takeovers (Amendment) Regulations, 2007.

The transaction will be treated as an inter se transfer among qualifying promoters, which means that Hoechst will not have to come out with an open offer to the minority shareholders of Aventis Pharma. The acquisition is likely to be completed on or after March 30.

Data available from the stock exchanges for the period ended December 31, 2009, showed that the UB group holding in Aventis Pharma is held by four key entities that include Kingfisher Finvest India Ltd, United Breweries Holdings, McDowell Holdings Ltd apart from Mallya Pvt Ltd. Mallya also holds 80 shares of Aventis Pharma.

The Aventis Pharma stock closed 3.84 per cent higher at Rs 1,827.25 on the Bombay Stock Exchange even though the price of Rs 1,750 per share marks a discount of 4 per cent.

It was not immediately clear what the UB group would do with the proceeds from the sale. The speculation is that the money will be used to retire a part of the Rs 5,600- crore debt of Kingfisher Airlines.