Sun reaches out to Taro shareholders ahead of Dec. 31 annual meeting

By Lisa Kerner

Charlotte, N.C., Dec. 18 - Sun Pharmaceutical Industries Ltd. chairman and managing director Dilip Shanghvi accused Taro Pharmaceutical Industries Ltd. chairman Dr. Barrie Levitt of making "special efforts" to spread "lies and misrepresentations about Sun Pharma with, of course, the overt support of the rest of the Taro board."

Shanghvi made his remarks in a lengthy letter to Taro shareholders on Thursday.

According to Shanghvi, Levitt is trying to divert Taro shareholders' attention away from "the 'all encompassing' protection being proposed to be given to 'independent directors' as part of a payback for their complicity in illegally perpetuating control by the Levitt/Moros family over Taro in violation of contracts signed by the family."

In the letter, Shanghvi said Levitt's recent letters to shareholders are "riddled with misrepresentations, false statements and omissions, including that the upcoming annual meeting involves a vote about Sun's tender offer."

Shanghvi denied that Sun is trying to coerce Taro shareholders to tender their shares.

"What Dr. Levitt tries to obscure is that he signed the option agreement to sell his shares to Sun at $7.75 per share. He conveniently forgets to mention that the purpose of our tender offer is to comply with the terms of that option agreement," the letter said.

Shanghvi urged Taro shareholders to vote against the election and re-election of the proposed directors as well as against the indemnification proposal at the annual meeting on Dec. 31.

Sun's offer too low

Last week, Taro asked its shareholders to support the company's board of directors and reminded shareholders of Sun's efforts to "seize control" of Taro at a price that it considers to be too low.

According to Taro, Sun's continuing $7.75-per-share tender offer is "significantly below current market prices."

In May 2007, Taro agreed to be acquired by Sun for $7.75 per share and then terminated the merger agreement in May 2008. Sun offered to increase the price to $10.25 per share, which Taro rejected.

As previously reported, Sun exercised some options to acquire shares of Taro from the company's controlling shareholders on June 25, 2008 and began the tender offer on June 30, 2008.

Taro is a pharmaceutical company with offices in Israel and Hawthorne, N.Y.

Mumbai, India-based Sun makes specialty pharmaceuticals and active pharmaceutical ingredients.

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