OAO Pharmstandard snapped four days of gains on concern minority shareholders won’t be able to participate in a share buyback of Russia’s largest drugmaker.
The stock dropped 1.5 percent to 1,401.10 rubles as of 12:09 p.m. in Moscow. Markets were closed June 11-12 for public holidays.
Pharmstandard approved a possible purchase of as much as 1.1 billion rubles ($33.7 million) of ordinary shares by its subsidiary OAO Pharmstandard-Leksredstva during the next 12 months, according to an e-mailed statement June 9.
“It’s unclear who will benefit from this buyback,” Tigran Hovhannisyan, an analyst at Uralsib Capital in Moscow, said by phone. “Most likely, this is a hidden dividend for the majority shareholder.”
The purchased shares may be used in merger and acquisition deals, according to the statement. The company’s shareholders decided not to pay 2011 dividends on May 25. Augment Investments Ltd. owns 54 percent of the company, Bloomberg data show.