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Publication : Capital Market News
Provider : Capital Market Publishers Pvt. India Ltd.
July 14, 2004
Pharmacia Healthcare plummets
The stock plunged today due to unfavourable ratio for the merger of
Pharmacia in Pfizer.
Pharmacia Healthcare shares were down 10% on BSE in mid-morning trades at Rs
102.85 - the lowest permissible level of the day. 3,367 shares changed hands
in the counter on BSE.
The stock plunged today after the ratio for merger of Pharmacia in Pfizer
was approved just before trading began. As per the ratio of merger,
Pharmacia shareholders would get 1 share of Pfizer for every 5 shares of held in Pharmacia.
The ratio is unfavourable to the Pharmacial shareholders if the ruling
market prices of the two scrips are any indication. On Tuesday (13 July
2004), Pharmacial scrip closed at Rs 114.25 and Pfizer closed at Rs 455.
Pharmacia is a very thinly traded stock. The scrip recovered from lower
levels in the last few days. From a low of Rs 100.04 on 24 June 2004, the
stock moved up to Rs 114.25 on 13 July 2004.
Shares of Pfizer witnessed a sharp surge in the last few days on the back of
strong Q2 May 2004 results. From a low of Rs 380.15 on 16 June 2004, the
stock surged to Rs 450.95 on 30 June 2004. It moved in the Rs 443-457 band
later.
The merger of Pharamcia in Pfizer is part of the global merger. Pfizer Inc
globally acquired Pharmacia in April 2003. Pfizer Inc. holds a 75.1% stake
in Pharmacia Healthcare and 40 per cent in Pfizer India. In fact, the operation integration of the two companies in India was already completed in
2003.
Pfizer's oncology segment in particular will get a boost following the legal
merger. The high growth key products of Pharmacia Healthcare include Selsun,
Claribid and Rash-free.
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