Family rift clouds $7 bn sale of Cipla

Some members questioned the need to exit the eightdecade-old business

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Differences within the Hamied family, Cipla Ltd’s promoters, over the pricing of the deal and the decision of patriarch Yusuf K. Hamied to sell the drug maker threaten to derail the $7 billion sale plan, according to five people aware of the discussions.

Any sale may take longer than anticipated since a consensus is yet to emerge within the Hamied family, the people said on condition of anonymity. Some family members have questioned the deal’s pricing of around ₹1,200 per share and the family’s decision to exit the eight-decade-old business.

“A non-agreement on pricing from a faction of the Hamied family has put the deal process on the slow track,” said one of the people. “The third-generation of the

Cipla promoter group family is not keen to exit at this stage unless a substantial premium is offered to their shareholding,” said the second person. According to the first person,

Sophie Ahmed (Yusuf Hamied’s sister) and Samina Hamied (Yusuf’s younger brother M.K. Hamied’s daughter), who together own 7.93% of Cipla, are not in favour of the deal.

Samina Hamied declined to comment on thematter. Emails sent to Hamied family members remained unanswered.

According to several news reports, Gujarat-based Torrent Pharmaceuticals Ltd has evinced interest in buying the promoter stake and taking over Cipla, valuing the company at over 1 lakh crore.

Kotak Mahindra Bank Ltd's investment banking arm has been mandated by a faction of the Hamied family to shortlist an appropriate acquirer.