Ranbaxy, Daiichi say deal`s on track

Ranbaxy Laboratories and Daiichi Sankyo on Monday sought to quell speculations about their multi-billion deal going awry even as the Indian drug maker’s shares plunged 10.45% (Rs 55) to Rs 475.90 after news of the US government initiating legal action against Ranbaxy for allegedly forging documents and selling sub-standard products became public. This is the largest single-day fall experienced by Ranbaxy shares in the last seven years, said an international news agency. On BSE, Ranbaxy shares closed at Rs 475.90, as against Friday’s close of Rs 532.15. Meanwhile, a record 1.07 crore and 28.9 lakh shares were traded at the National Stock Exchange (NSE) and BSE. The nature of the investigations sparked off speculation that Daiichi might take a relook at its takeover of Ranbaxy, as it would not want to be caught in a legal wrangle. A penalty, it was speculated, could run into billions of dollars, if the Indian company was found guilty. “Daiichi’s deal with Ranbaxy could possibly have clauses where the deal falls apart in case of serious or material change in business prospects,” said a CLSA analyst. Adds Angel Broking pharma analyst Sarabjit Kaur: “Ranbaxy shares fell after the market took note of the fact that there will be repercussions on the company’s operations in the US, and possibly impact the buyout deal with Daiichi Sankyo.” However, the two companies maintained that the deal was on track. A Ranbaxy media release said, “Ranbaxy clarifies that the company’s deal with Daiichi Sankyo is binding and final, and remains on track.” The company reiterated that allegations levelled against it in the motion filed by the US Department of Justice in a US court was baseless.