Cipla founding family’s stake sale in shambles over $13B valuation target

According to sources, the sale of a stake in Cipla Ltd. is in peril as potential buyers have hesitated at the 1.09 trillion rupee ($13.1 billion) valuation set by the founding family.

Negotiations between member of the founding family and prospective buyers, including companies in the pharma industry and private equity firms, have stalled, as the founders are demanding nearly 1,350 Indian rupees per share, the sources revealed. The price indicates a premium close to 10% over Wednesday’s stock price close.

The family shareholder group, known in India as the promoter group, controls around 33% of Cipla’s stock, which are worth nearly $4 billion at Wednesday’s closing price. Cipla shares have climbed about 16% since CNBC-TV18 broke the news that the Hamied family was likely to sell part of their stake.

The individuals, who requested anonymity since the material was personal, asserted that the family members might sell all or a portion of their individual stakes in Cipla. The company was founded in Mumbai in 1935 by the father of Non-Executive Chairman Yusuf K. Hamied, and at the turn of the millennium, it set the benchmark for the distribution of low-cost, generic HIV drugs across Africa.

According to the people, discussions are still ongoing and no decision has been made on the agreement. The sources claim that the family members still have the choice to lower their asking price or decide not to proceed with the sale. A spokesperson for the company did not respond to inquiries for comment.