Sun Pharmaceutical extends offer for Taro; mediation process continues

By Lisa Kerner

Charlotte, N.C., March 6 - Sun Pharmaceutical Industries Ltd. subsidiary Alkaloida Chemical Co. Exclusive Group Ltd. extended the expiration date of its $7.75-per-share tender offer for the outstanding ordinary shares of Taro Pharmaceutical Industries Ltd. to 5 p.m. ET on March 20 from March 6.

As of 5 p.m. ET on March 5, holders had tendered 25,237 ordinary shares, according to Sun.

Sun said the extension keeps it in compliance with a continuing order issued by the Supreme Court of Israel temporarily prohibiting the closing of the offer until the Supreme Court issues a decision on the appeal by Taro.

As previously reported, the Tel-Aviv District Court ruled in favor of Sun that a special tender offer was not required.

Sun and Taro are continuing with a mediation process at the Supreme Court's recommendation. If the temporary order remains in effect on March 20, Sun said it expects to once again extend the offer.

Protracted merger process

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

Sun then said Taro was not entitled to terminate the merger. It 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. It has since been extended several times.

The dealer manager for Sun's offer is Greenhill & Co., LLC. MacKenzie Partners, Inc. is the information agent.

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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