The stock of Sun Pharma was down 1.3 per cent, while Ranbaxy dropped 2 per cent in trade. A writ petition has been filed by a group of investors alleging that entities with prior knowledge of the deal profited from the deal. The allegations were based on the belief that the Ranbaxy stock rose sharply ahead of the deal.
Sun Pharma had earlier this month said that they would acquire Ranbaxy Laboratories in an all stock deal which would create India's largest pharma company and the world's 5th largest specialty generic pharma company.
Under the agreement, Ranbaxy shareholders would receive 0.8 share of Sun Pharma for each share of Ranbaxy. This exchange ratio represented an implied value of Rs 457 for each Ranbaxy share.
The proposed transaction was unanimously approved by the Boards of Directors of SunPharma, Ranbaxy, and Ranbaxy's controlling shareholder, Daiichi Sankyo. Ranbaxy's board and Sun Pharma's board have recommended approval of the transaction to their respective shareholders.
Read more on the deal here
Today's decision is being termed correct in view of the fact the Ranbaxy stock had rallied, ahead of the announcement, indicating that there may have been insider trading in the stock.