India's Torrent said to be in talks with Apollo to borrow up to $1 bn for Cipla bid

Torrent in talks with Apollo to secure $1B loan for Cipla bid; Blackstone, CVC, Bain also interested.

India's Torrent Pharmaceutical is in preliminary talks with Apollo Global Management to secure a loan of up to $1 billion to help fund a planned bid for Cipla, two people briefed on the discussions said.

Torrent is hoping to secure roughly $3 billion to $4 billion in financing for the bid for its much bigger rival, they said. Bernstein analysts have estimated that a deal for about 60% of India's No. 3 drugmaker could be worth as much as $7 billion — potentially India's largest pharma deal to date.

Torrent has also been in talks with CVC Capital Partners and Bain Capital who might become equity partners in a consortium and contribute as much as a combined $1.5 billion to the deal, sources have said.

Cipla's founding family is keen to sell their 33.4% holding, sources say, and a bid for that amount would also trigger an open offer for another 26% as per Indian regulations.

Blackstone is also interested in bidding for Cipla, sources have also said.

Apollo is considering purchasing a small part of the Cipla founding family's stake but a final decision will depend on how talks progress with Torrent, said one of the two people who declined to be identified as the talks were private.

Apollo is "quite bullish on their Asia strategy, and India in particular...both Cipla and Torrent have strong balance sheets," the person said.