Shares of Sequent Scientific Ltd ended over 18% higher on Thursday trade after the company terminated the share purchase agreement to acquire Tineta Pharma Pvt Ltd.
The shares of the company surged over 13% in Thursday's early trade. The stock hit a intraday high of ₹74.80 and intraday low of ₹63.25.
"The transaction contemplated under the share purchase agreement has not been materialised. Therefore, the company will not acquire Tineta and the share purchase agreement entered by the company with Tineta and its promoters on November 07, 2022 stands terminated," said the company in an exchange filing on Wednesday.
With Tineta Pharma, the company entered into an agreement last year to purchase a 100% stake for an enterprise value of ₹218 crores, to be paid in cash in the amount of ₹153 crore and preferential allotment in the amount of ₹65 crore. The deal was supposed to close in the fourth quarter of FY23.
On the technical front, the stock recorded a new 52-week low in the past seven days, and in Thursday's trade, the stock was trading at high volume of 19.7 million with a price gain of 18.85%.
"This stock has been an underperformer but backed by news it has seen strong positive traction. The stock has moved more than 13% higher in the early trade supported with strong volumes; further upmove can be expected. 77 is next resistance and 65 is support," said Rajesh Bhosale - Equity Technical and Derivative Analyst, Angel One.
The stock price fell 43.2% and underperformed its sector by 43.6% in the past year.
According to Prashanth Tapse, Research Analyst, Senior Vice President Research, Mehta Equities, the Street welcomes the decision of calling off the acquisition. He assumes the deal structure was not in favour of Sequent.