The Hindu Business Line : Ranbaxy was not for `any' price for Betapharm: CEO

JUST hours after rival Dr Reddy's Ltd pipped his company for acquiring Germany's Betapharm Arzneimittel GmbH, Mr Malvinder Mohan Singh, CEO & Managing Director of Ranbaxy Laboratories Ltd, did not make his disappointment obvious.

The man at the helm of the Delhi-based company said that he was not willing to pay `any' price for the acquisition.

Mr Singh told Business Line, "Germany is an important market for us and we have been scouting for opportunities. This is one opportunity that we had identified and looked at, and we were in the final round. At the same time, from our perspective, we had made an aggressive bid but we decided to leave at what we believed was an optimal price."

He added that the company did not want to get into a "two horse race where we were trying to outbid the other. We had to keep a balance between strategic and financial value."

Europe health reforms: The healthcare reforms being implemented in Europe would impact the overall dynamics of that market. Mr Singh was of the opinion that there could be downward pricing pressures (similar to the US market).

"The market dynamics will be different. One needs to be aware and take the value before taking a final call," he added.

However, the Betapharm setback will not deter Ranbaxy from pursuing other acquisition opportunities. Germany would continue to remain an important market for Ranbaxy and it will continue to look at other options over and above organic growth.

"We have a good business there that is growing well. I will not be willing to pay any price, I think there has to be a value addition and there has to be a return on the acquisition," said Mr Singh.

When asked whether there has been an inflation in acquisition cost in recent times, Mr Singh said, "Every buyer will have to evaluate what they think is value."

FCCB issue launch: Meanwhile, Ranbaxy today announced that it has launched a $400 million foreign currency convertible bonds issue. The bonds have a tenor of five years and one day and are convertible into equity shares at a premium of 60 per cent to the BSE closing price of Rs 447.70 as on February 15. The yield to maturity of the bonds is set at 4.8 per cent per annum.

Mr Singh said, "The proceeds from this offering will be used towards potential acquisitions and to finance our capital expenditure programme." Ranbaxy shares closed at Rs 431.85 on the BSE, down from Wednesday's last traded price of Rs 446.65.