OAO Pharmstandard, Russia’s biggest pharmaceutical company, fell the most on the benchmark index today and slumped the most in four years in London after offering to buy out at a discount investors who oppose a planned spinoff of its over-the-counter unit.
Shares slumped as much as 4.7 percent and traded down 4 percent at 2,141.10 rubles by 1:09 p.m. in Moscow. The volume of trading was equivalent to about 3,509 percent of the three-month average. Global depositary receipts fell 11 percent, the most since June 2009 on a closing basis, to $17.85.
Pharmstandard will offer to buy out shareholders who don’t vote for the planned spinoff of its over-the-counter unit for 2,180 rubles a share, equivalent to about $16.50 a GDR, at a Sept. 27 meeting, Pharmstandard said, citing a board decision in a regulatory filing yesterday after the Moscow market closed. That was a 2.3 percent discount to yesterday’s closing price in Moscow, and 18 percent in London.
“This is poor corporate governance practice, they’re just trying to get rid of the shareholders on the cheap,” Ivan Kushch, an analyst at VTB Capital, said by phone. “This buyout will affect most of the minority shareholders. And those shareholders that don’t accept the buyout will be left with the old Pharmstandard shares and a new unlisted and illiquid asset.”
Shares in the over-the-counter drug unit will be distributed proportionally to Pharmstandard stockholders, the Moscow-based company said in a separate statement yesterday, citing the company’s board decision. A conference call will be held on July 10 to clarify details, Pharmstandard said.
The drugmaker also said yesterday that it plans to purchase Bever Pharmaceutical Pte Ltd., based in Singapore, for $630 million. Pharmstandard plans a shareholder meeting Aug. 17 to vote on the purchase of Bever, a related-party transaction, according to a separate regulatory filing.
The Russian company didn’t describe Bever in the filing. Irina Bakhturina, an investor-relations executive for Pharmstandard, declined to comment on the acquisition in a telephone interview today.
Bever is owned by Andrey Osipov, according to company records filed with Singapore’s Accounting and Corporate Regulatory Authority. An Andrey Osipov worked at billionaire Roman Abramovich’s Millhouse during the period Pharmstandard was being formed, leaving in about 2004. Bakhturina said she couldn’t immediately comment.
In 2003, Abramovich and Viktor Kharitonin, now Pharmstandard’s chairman, bought Russian plants of ICN Pharmaceuticals to create the company.
Pharmstandard’s GDRs started trading in London in 2007. Abramovich and his partner Evgeny Shvidler sold a 17 percent stake in the company to Kharitonin and board member Yegor Kulkov the following year. Kharitonin and Kulkov’s Augment Investments Ltd. holds 54 percent of the drugmaker, according to its website. Kharitonin owns 38 percent of Pharmstandard, according to Forbes’s billionaires list this year.
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