R Ravichandran & ENS & FE

Chennai/ Mumbai, April 12: Even as unconfirmed reports said Solrex Pharmaceuticals, a company linked to the Ranbaxy Group, had hiked its stake to a shade under 15 per cent at 14.72 per cent in Chennai-based Orchid Chemicals and Pharmaceuticals Ltd, the latter is now looking at various options, including joining hands with Ranbaxy Laboratories as an alliance partner, market sources said here today. It is believed that Solrex Pharma may have mobilised a further 3 per cent-plus stake in the open market on Friday, taking its total stake close to 15 per cent, the threshold beyond which Solrex will need to make a mandatory open offer for another 20 per cent according to Sebi takeover norms.

Although Ranbaxy said earlier this week that it did not believe in hostile takeovers, Solrex has continued to mobilise stake in Orchid. The latest stake purchase could not be independently confirmed.

It is expected that when the market opens on Tuesday (after a day’s holiday on Monday) things will emerge clearly, said the sources. When contacted, Orchid Chemicals MD K Raghavendra Rao said, “I have nothing to comment at this point of time. I haven’t received any communication on the further mobilisation of stake. I am facing an impossible situation. Let something happen, and then we will react.” He declined to comment further on the possibilities.

However, according to market sources, the company is weighing a number of options. One of the main options, if the inevitable happens and the Ranbaxy Group’s stake goes above 15 per cent, includes becoming an alliance partner of Ranbaxy in both the domestic and overseas markets. Collaboration is not new to Orchid as it has been outsourcing to leading pharma companies in the world, the sources added.

Orchid’s deputy MD C B Rao also recently told a news conference at Tokyo that although Solrex was a company linked to Ranbaxy, he saw no takeover threat. The takeover drama unfolded early last week when news flowed in that privately held Solrex had acquired an 8.1 per cent stake in Orchid the previous week in two chunks from the open market.

editor@expressindia.com