OAO Pharmstandard climbed for the third day in Moscow as the chairman of Russia’s biggest drugmaker said the company is seeking a strategic investor for its over-the-counter unit.
Pharmstandard rose 4.3 percent to 1,714.80 rubles by 5:19 p.m. in Moscow, with volume of about 13 percent of the three-month average. The stock fell 0.7 percent in London in the second day of declines. Pharmstandard is in no hurry to dispose of the unit and may choose to maintain ownership, billionaire Chairman Viktor Kharitonin said in an interview.
Last month, investors fled the stock after Pharmstandard announced a plan to pay as much as $630 million to buy Bever Pharmaceutical Pte Ltd., which is controlled by a board member, and to spin off its OTC drug business. Kharitonin said the purchase of Bever will be a good deal for the company and that he has no ulterior motive, such as taking Pharmstandard private.
“Kharitonin only rarely gives interviews and this is the first time that a company official has admitted that the OTC business is for sale,” VTB Capital analysts led by Ivan Kushch said in an e-mailed note. “We remain concerned about the company’s strategy and whether minority shareholders will be winners in this game.”
In the three days after the July 8 announcement, Pharmstandard shares tumbled 45 percent in London and 34 percent in Moscow, while Russia’s benchmark Micex Index gained 1.4 percent.
Shareholders will vote on the acquisition of Bever at a special meeting on Aug. 17. The purchase will probably be completed by the end of the year, and the company will be folded into the OTC business, Kharitonin said. Pharmstandard plans another shareholder meeting Sept. 27 to vote on the spinoff of the non-prescription unit.
VTB Capital analysts reiterated their sell recommendation on the stock. Pharmstandard dropped as much as 4.7 percent to $14.26 in London.