Astrazereneca India Case Study

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As the previously discussed case Fresenius Kabi had unsettled the legal regime on delisting process, the case of AstraZeneca Pharma has come up raising similar questions about the delisting guidelines in India. THE CASE OF ASTRAZENECA The listed company in scrutiny, AstraZeneca India is a 90% subsidiary of AstraZeneca Pharmaceuticals AB Sweden. The promoters, AstraZeneca Pharmaceuticals had made attempts to delist itself multiple times in the last decade. It had made a voluntary offer in 2002 through open market purchase procedure increasing its shareholder from 56.51% of the shares to 91.61% of the shares. Another unsuccessful attempt was made in 2004 when it made a delisting at a price of Rs. 825. The retail investors were holding the company for ransom and the final exit price went up to Rs. 3000 for each share. The promoter, unable to buy shares at the exit price called off the delisting process. AstraZeneca, in compliance with the SEBI guidelines requiring listed companies to have a minimum public shareholding of 25% through an offer for sale of shares. A major chunk of the shares were acquired by foreign institutional investors who were allegedly in a tacit agreement to ease the delisting process for AstraZeneca. As per the delisting…show more content…
Even though the prices of the shares of AstraZeneca prior to the OFS had closed at Rs. 805.3, the floor price for OFS was as low as Rs. 490 and the Elliot Group was successful in purchasing all the shares at Rs. 625.35 only. The prices bid by the Elliot group were significantly above the floor price and the prevailing indicative prices and this was the reason Elliot group had successfully managed to purchase a major chunk of shares available. Had the promoters of acted independently, the floor price would have been higher to increase the final value of shares after

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