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Family conflict hampers $7 billion Cipla sale

Oct 11, 2023

By: BlinkX Research Team

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 drugmaker 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.

Sophie, Samina, Rumana Hamied and Shirin Hamied (M.K. Hamied’s wife who holds 0.79%) are more in favour of retaining promoter control rather than selling at ₹1,200 per share, which is 3.5% above Monday’s closing price and 12.5% premium to Cipla’s six-month average price.