July 10, 2013 / 4:06 PM / 6 years ago

Pharmstandard plans share listing for over-the-counter spin-off

* Company to separate over-the-counter unit

* Shares have dived 17 percent this week

* Analysts have questioned lack of information about deal

MOSCOW, July 10 (Reuters) - Russian drug maker Pharmstandard said it plans a stock market listing in Moscow for the spin-off of its over-the-counter unit.

The Russian company, majority owned by businessmen Viktor Karitonin and Egor Kulkov, said on Monday it is planning to spin off the unit as well as buy a Singapore-based company called Bever Pharmaceutical in a deal valued at $630 million.

“We expect the company will ... go public and will list,” CEO Igor Krylov told analysts on a conference call on Wednesday.

The listing would start with local shares, he said, in answer to a question about whether it would be on Russia’s Moscow Exchange. He said it was too early to discuss other venues such as London.

Pharmstandard’s shares have dived 17 percent since Friday. Analysts said the lack of information given about the spin-off, the Bever deal and the price indicated for shareholders who vote against the move was negative for investors.

“Pharmstandard’s reorganisation looks like poor corporate governance,” said VTB analyst Ivan Kushch in a research note this week, downgrading the company from “hold” to “sell”.

“Meanwhile, the purpose of the reorganisation is unclear, as is management’s strategy with respect to post-reorganisation operations.”

Pharmstandard’s shares fell on Tuesday after the company said it would buy back shares from investors who do not support a spin-off deal at 2,180 roubles, a 2.5 percent discount to its closing price the previous day.

Analysts peppered Pharmstandard with questions about the Bever acquisition on the lengthy call, after noting a lack of information on the company on the internet.

“How should shareholders decide if Bever is worth this price if you don’t disclose any information?” one analyst asked.

Pharmstandard’s executives declined to say who owned Bever but said its shareholder was another company. They did not reveal that company’s name, citing confidentiality agreements.

Bever, which will become part of the unit to be spun out, has a contract for production in Italy, they said. Pharmstandard said the branded OTC unit, which sells anti-cold and flu medicine and multivitamins, contributed 25 percent of the company’s revenue last year and 33 percent of profit.

Last year, Pharmstandard reported 50.1 billion roubles ($1.5 billion) in revenues and 13.2 billion in earnings before income tax, depreciation and amoritziation (EBITDA).

$1 = 33.0375 Russian roubles Reporting by Megan Davies; Editing by Douglas Busvine and Louise Heavens

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