Templeton responds to Taro; asks company to reveal financials, findings

By Lisa Kerner

Charlotte, N.C., July 20 - Taro Pharmaceutical Industries Ltd. investor Templeton Asset Management, Ltd. fired back at the company in response to its July 16 letter from Tal Levitt. Templeton owns 2,889,669 shares, or 7.9%, of the company.

Templeton executive chairman Mark Mobius defended a vote against the proposed merger with Sun Pharmaceuticals Ltd. as being in good faith "because it is required for us to fulfill our fiduciary duty to our clients."

Mobius urged Taro to act in the best interests of its shareholders by revealing audited financial accounts, the results of the independent audit done in 2006, full details of the fairness opinion done by Merrill Lynch, the full findings by Alix Partners, and the terms and conditions relating to the company's creditors. The request was disclosed in a schedule 13D filing with the Securities and Exchange Commission.

As previously reported, in his letter to Templeton Levitt reiterated that Taro has not misled shareholders, nor has it provided Levitt, his family or Sun "with any improper information beyond that which is standard, customary and legally permissible."

According to Levitt, "Templeton, and only Templeton, wants to enjoy what it sees as the benefits of an investment in Taro at $6.00 per share." In addition, the Sun merger price of $7.75 per share was the "culmination of an extensive and exhaustive process conducted by the Blackstone Group."

On May 20, Taro agreed to be acquired by Sun Pharmaceutical Industries Ltd. for $7.75 per share in cash in a deal valued at $454 million including the refinancing of some $224 million in net debt, a company news release stated.

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

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