Matrix open offer, delisting on cards

Mylan Laboratories Inc. has begun preparations for an open offer to mop up the near-24% public shareholding in its Indian subsidiary Matrix Laboratories Ltd, say three people familiar with the matter.

The open offer for Matrix could be a first step in delisting the local company’s scrip from the stock markets, which in turn is expected to give Mylan more flexibility to leverage the Indian drug maker’s manufacturing assets better with little regulatory obligations.

Mylan is the world’s third largest generics pharmaceuticals firm after its May buyout of the non-patented drugs business of Merck KGaA. The intent to delist the scrip of the Hyderabad-based Matrix was confirmed by three people close to the development—two executives of the company and a consultant who works closely with the drug maker.

The public shareholding—nearly 24 %—in Matrix is marginally below the 25% listing requirement that India’s stock market regulator plans to make mandatory by May 2008 (up from the current minimum public holding requirement of 10% in listed companies). If Mylan wants the Matrix scrip to remain listed, it would have to offload some of the Hyderabad firm’s stock or dilute equity capital. Promoter Prasad holds about 5% in the company.

Read more in The Livemint article.