Nov. 21 (Bloomberg) -- Cipla Medpro South Africa Ltd. rose the most in more than two years after Cipla Ltd., India’s third-largest drugmaker by market value, offered to buy a 51 percent stake in the local pharmaceutical company.
The stock advanced 7.9 percent, the most since August 2010, to 8.30 rand by the close in Johannesburg. That values the company at 3.71 billion rand ($413 million).
Cipla Medpro received an indicative proposal from Cipla India to buy a majority stake for 8.55 rand a share, excluding the company’s final dividend, which will be capped at 10 cents a share, the company said in a statement today. Cipla India has “substantially concluded” a due-diligence study of the company, it said.
A transaction will “support the company’s expansion into collaboratively identified African markets,” Cipla Medpro said.
The company’s 30-day historical volatility, a measure of stock swings, increased to 34 from 26.4 yesterday. The FTSE/JSE Africa All Share Index’s 30-day volatility measure was at 8.9 compared with 9.2 yesterday. A higher reading means an asset’s price can have bigger moves. More than 10 million shares traded, more than seven times the daily average over the past three months.
Cipla India has been a core business partner of Cipla Medpro since the South African company was founded in 1993, it said in the statement.
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