Elder wants majority stake in UK co

MUMBAI: Mid-sized drug firm Elder Pharmaceuticals, which controls 21% stake in NeutraHealth, has made an offer to shareholders of the UK-based company to purchase additional equity. If successful, the move will raise Elder���s shareholding in the company to 60%. The indicative partial offer price is at or around 5.5 pence per share.

On Friday, Elder���s stock closed at Rs 214 on BSE, down 2.24%, from its pervious day���s close. NeutraHealth���s share price closed at 5.25 pence on Friday on the Alternative Investment Market of London.

���Currently, we do not have any presence in the UK market. We are hoping to get access to a strong base in the UK as well as in other European countries by acquiring management control in the company,��� said Elder Pharma director (international markets) Alok Saxena.

The company recorded a net sales of Rs 551.1 crore in FY08 with a profit after tax (PAT) of Rs 68.6 crore. Shelcal range of calcium supplements is Elder���s top brand.

Until Elder signs an agreement with the NeturaHealth management, the total cost for the equity purchase cannot be estimated, said the company officials. ���We have already raised ��10 million from State Bank of India UK,��� said Mr Saxena.

In 2007, Elder Pharma had acquired a 20% in NeutraHealth for ��5.63 million, which the company eventually increased to 21% in the past one and a half years. NeutraHealth has three subsidiaries, which market and distribute a range of neutraceutical products such as vitamins, specialised health supplements, over the counter medicines and ���Detox in a Box��� health treatments as well as ���TravelGuard��� range of travel-related health products.

Elder Pharmaceuticals is hoping to market its brands in the UK and also manufacturing some of NeutraHealth���s brands. The 11 countries of Western Europe represent a total market of over 403 million people with a total pharmaceutical market value of $239.1 billion in 2008.

Espicom, a market analysis company, estimates that this market would grow by $78.6 billion over the next five years and would touch $317.7 billion by 2013.