Emami loses Paras despite highest bid
Kolkata-based Emami lost out to British consumer goods firm, Reckitt Benckiser, in the race for Paras Pharmaceuticals, even though the company claims its bid was higher at Rs 3,400 crore.
“We are still unaware about what really went wrong with our bid. Emami’s bid was much above the Reckitt’s Rs 3,260 crore and was around Rs 3,400 crore, and was the highest one. They were also negotiating with us regarding this, and the mystery is why it has been allotted to another company for a lower value,” a top Emami official said on Monday. He added that Paras had not yet conveyed the reasons behind why it chose Reckitt over Emami.
The announcement that Reckitt had emerged as the preferred bidder came as a surprise, as Emami was tipped to be the frontrunner in the race. Emami is yet to decide whether it would go into a confrontation with Paras. “It should not have happened. We are yet to decide our course of action,” he said.
Sources close to the deal pointed out that Paras wanted a multinational company to bag the deal rather than a promoter-driven company. “Moreover, it was Reckitt's financial ability, which put it at an advantage,” they said.
Emami founder directors, R S Agarwal and R S Goenka, had said in an earlier interview to Business Standard the company will bid aggressively for Paras, as they believed it would change the profile of Emami.
Reckitt will buy the 63 per cent stake of private equity firm Actis and shares of the promoter Patel family, including Paras founder Girish Patel, Reckitt said in a statement.
The Ahmedabad-based company, which clocked in sales of more than Rs 400 crore in 2010, has a wide-ranged product portfolio, including Moov pain relief ointment, Krack heel care lotion and D'Cold. A number of multinational drug majors like GlaxoSmithKline, Sanofi-Aventis, Novartis AG, Johnson & Johnson, Taisho Pharmaceutical were understood to be in the fray.
Emami director Aditya V Agarwal said, "There is a non-disclosure agreementin place. As far as Reckitt is concerned, we haven’t received any informationyet.” On the company’s future plans, Agarwal said, “We are looking at other acquisitions, in abroad too.”
Emami board had recently approved raising Rs 5,000 crore via debt and equity, which can be used for acquisitions in domestic and overseas markets. “Our aim is to have inorganic growth by investing in several sectors. Currently, our concentration is on healthcare and food sectors,” Agarwal added.