Shares of JB Chemicals and Pharmaceuticals fell 4.5 percent on September 25 on news that the much-anticipated deal for KKR's 54 percent equity stake in JB Chemicals is on the brink of collapse due to disagreements over the valuation.
At 1.10 PM, shares of JB Chemicals traded 2.8 percent lower at Rs 1,890. The stock has gained 16 percent in the past six months, underperforming the Nifty 50 which gained nearly 18 percent during the same time frame. The stock had been giving positive monthly returns for the past two months but has declined over 3 percent so far in September.
What was expected to be one of India's largest pharma sector deals in 2024, valued at around $2 billion, is now facing major obstacles as prospective buyers—Torrent Pharma, EQT, and Alkem Laboratories—reconsider their bids.
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Negotiations appear to have reached a critical impasse, with the valuation of KKR's stake emerging as a key sticking point, business news channel ET Now reported citing sources familiar with the development. KKR, which acquired approximately 65 percent of JB Chemicals in July 2020, had been looking to offload its holdings.
Torrent Pharma, which had previously approached banks for financing, and Alkem Laboratories, are now reportedly planning to withdraw their bids. Private equity firm EQT, another contender in the deal, has also backed away from its proposal.
The market value of KKR's stake is still pegged at around $2 billion, but the ongoing valuation disagreements have cast doubt on the future of the sale.
KKR & Co Inc also known as Kohlberg Kravis Roberts & Co, is an American global investment company that manages multiple alternative asset classes, including private equity, energy, infrastructure, real estate, credit, and, through its strategic partners, hedge funds.
Moneycontrol is yet to independently verify the development.
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