Mumbai, July 11: The Baroda-based Sun Pharmaceuticals has garnered additional equity of only 1.25 per cent from its open offer for shares of Gujarat Lyka Organics (GLO). Sun made the mandatory open offer to acquire up to 31.80 lakh shares of Rs 10 each, representing 20 per cent of the expanded equity share capital of GLO, at a price of Rs 10 a share.

The offer, which opened on June 10, closed on July 10. It was managed by LKP Merchant Financing Ltd.

Company sources said the level of acceptances for the offer was two lakh shares, or 1.25 per cent. This was a clear indication of investor confidence in the new management of Gujarat Lyka, they said.

In November 1996, Sun Pharma along with its associates and investment companies Virtuous Finance Ltd, Jeevanrekha Investrade Pvt Ltd and Package Investrade Pvt Ltd had negotiated to acquire 78.36 lakh equity shares of Rs 10 each for cash at par in GLO, representing 49.28 per cent of its expanded equity capital.

GLO passed a board resolution on November 20, 1996 proposing such allotment to the offerors on or after the date of the public announcement required to be made under the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1994. The announcement was made on November 23, 1996.

The acquisition of Gujarat Lyka had cost the Sun management Rs 7.83 crore and was funded through internal accruals. Currently, Sun Pharma has five representatives out of the 10 directors on the Gujarat Lyka board.

Sun expects to break even at Gujarat Lyka during 1997-98. Gujarat Lyka registered a loss of Rs 10.83 crore for the year ended March 31, 1997.The alliance with GLO is also expected to give Sun a considerable boost in the cephalosporin market as several bulk drugs in this segment are off patent.

It would also give the company access to technology for important third generation cephalosporins.