Torrent Pharmaceuticals Limited (BSE:500420)'s bid to acquire the stake of the promoter, the Hamied family, in Cipla Limited (NSEI:CIPLA) has stalled over valuation differences, said people with knowledge of the matter. That has derailed plans to create one of India's biggest pharmaceutical companies, at least for now. The third generation of the Hamied family had been in discussions with their counterparts, the Sudhir and Samir Mehta family of Torrent.

Negotiations have been suspended by mutual agreement and may be revived later, said the people cited. The bid-ask gap is 15-20%, which appears to stem from the surge in Cipla shares since news of a potential stake sale by the Hamieds became public. Talks may resume if both sides find a meeting ground on the valuation, especially if the stock returns to `900-1,000 levels, said the people cited above.

?It's pens down at Torrent's side,? said one of them. ?The control premium asked will be difficult to bridge and then get an equity upside.

Once things cool off, I do believe re-engagement is possible." Technically, Cipla is free to negotiate with others, but Torrent is said to be the sole player left. The Cipla stock surge had seen rival contenders Baring PE Asia-EQT, the Abu Dhabi Investment Authority and Blackstone baulk at rising valuations. They too might jump back into the fray if the stock price drops, said investment banking sources.