Piramal Healthcare Ltd. plans to spend 25 billion rupees ($560 million) on a share buyback after the Indian drugmaker sold its domestic generic-medicine business to Abbott Laboratories.
Piramal aims to buy back 41.8 million shares at 600 rupees apiece, a 16 percent premium to the current price, the company said in a statement to the Bombay Stock Exchange today. The process may be completed by February, after regulatory approvals, it said.
The company, based in Mumbai, sold its local formulations business to Abbott Park, Illinois-based Abbott for $3.7 billion in May, the second biggest takeover in India’s health-care industry. Two months later, it sold its laboratory unit for 6 billion rupees to Super Religare Laboratories Ltd., controlled by billionaire brothers Malvinder and Shivinder Singh.
“The board evaluated various alternatives for rewarding shareholders and concluded that the buyback was the best way,” Ajay Piramal, chairman, said in a conference call with analysts today.
Piramal shares fell five percent to 515.55 rupees at the 3:30 p.m. close of trading in Mumbai. The stock has gained 38 percent this year. The announcement of the buyback was made after trading hours.
Piramal posted a net income of 125.4 billion rupees in the quarter ended Sept. 30, compared with 1.1 billion rupees a year ago, it said today. The profit included a one-time gain of 162.2 billion rupees from the sale of its businesses, the company said.