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Sun Pharma group company Silverstreet Developers LLP’s shareholding in Ranbaxy will be annulled during the merger, the company has said. Silverstreet had during the March quarter bought nearly six million Ranbaxy shares (worth about Rs 270 crore as of Monday), Bloomberg data show. The average share price of Ranbaxy during the January-March period was Rs 375 apiece.
Sun Pharma has said Silverstreet’s Ranbaxy stake buy doesn’t amount to insider trading, as these shares will be “cancelled” during the merger. In other words, new shares of the merged entity will not be issued to Silverstreet for its holding in Ranbaxy.
“Sun Pharma cannot issue its own shares to its subsidiary (Silverstreet) in exchange for Ranbaxy shares. The shares will be cancelled. It will be a neutral transaction for all stakeholders. We have the option of selling these shares. But it will raise regulatory issues on whether these shares were bought with possession of insider information,” said a senior executive at Sun Pharma.
