Shortly after word spread that Fosun Pharma might pawn off its $3.8 billion business Gland, the Indian drugmaker turned to the Bombay Stock Exchange to respond.
In a bout of M&A whiplash that boosted Gland Pharma’s shares early Tuesday, Bloomberg News first reported that Chinese conglomerate Fosun was working with an adviser to weigh interest in its controlling stake in Gland. Industry players and buyout firms are in the early stages of appraising Gland’s business, people close to the matter told Bloomberg.
Fosun Pharma picked up a 74% stake in Gland for about $1.1 billion back in 2017. Today, Gland's entire market cap is around $3.8 billion, according to the news service.
But Gland, which charted its own, separate buyout Tuesday morning, quickly surfaced on the Indian stock market to share its own knowledge of the situation.
In a filing (PDF), Gland said it “is not aware of any such information that its Promoters – Fosun Pharma and / or its Parent, Fosun International is considering sale of shares of the Company."
Gland added that it “is not in receipt of any communication in this regard from its Promoter(s) and is unable to comment on the same.”
In Mumbai, Gland’s shares climbed 7.6% Tuesday, charting their largest increase in more than a year, Bloomberg pointed out. Over in Hong Kong, Fosun Pharma shares rose 4.9%.
Gland, which is based in Hyderabad, focuses on injectable drugs like antibiotics and heart meds, the company explains on its website.
Sources close to the purported Gland sale talks added that Fosun’s high valuation expectations could pose a problem amid a tough financing environment. Fosun hasn't started a formal sale process, so there's no certainty any talks would lead to a transaction, the sources told Bloomberg.
Rumors aside, Gland itself made concrete M&A moves Tuesday. The company has locked in (PDF) a deal to pay up to 120 million euros to get its hands on European CDMO Cenexi Group.
Cenexi, which was founded in 2004, specializes in sterile liquid and freeze-dried fill-finish, with capabilities in cancer and complex manufacturing. The contractor boasts four production sites in Europe—three in France and another in Belgium, Gland explained. Cenexi will join Gland with about 1,372 employees in tow.
The move is designed to help strengthen Gland’s position on the European contract manufacturing and development scene. Gland Pharma added that it should be able to support future investments in Cenexi’s burgeoning manufacturing footprint, which will help transform the company into “a major CDMO player in the European market.”