Taro files suit to prevent Sun Pharmaceutical from blocking sale of Irish assets

By Lisa Kerner

Charlotte, N.C., June 19 - Taro Pharmaceutical Industries Ltd. told shareholders that it filed suit in Israel to keep Sun Pharmaceutical Industries Ltd. from preventing a sale of Taro's Irish operations and to protect the shareholders' interests.

In a June 19 letter to shareholders, Taro said its board of directors continues to believe that the sale is in the best interest of the company and will "substantially improve" Taro's profitability and cash position.

It was previously reported that Sun stated that "any plan by Taro's board of directors to divest the Irish facilities is part of a concerted effort to discourage Sun from pursuing its rights to acquire Taro."

According to Taro, Sun has been invited to submit an offer to purchase the Irish operations.

Taro also filed an action in Israel in May seeking a declaratory ruling that should Sun attempt to purchase Taro shares in an amount that would increase its voting power to more than 45%, it must comply with the special tender offer rules under Israeli law that protect minority shareholders.

On May 28, Taro's board unanimously voted to terminate the merger agreement with a subsidiary of Sun based on advice from its financial adviser and the company's turnaround since 2007.

According to Taro, the merger was not terminated until after Sun had "repeatedly rebuffed" its attempts to negotiate the price in the year-old merger agreement.

Sun said in a prior statement that Taro is not entitled to terminate its merger with Sun. However, Taro maintained that either party could terminate the agreement after Dec. 31.

As already reported, Taro originally agreed to be acquired by Sun for $7.75 per share in cash in a deal valued at $454 million including the refinancing of about $224 million in net debt.

Sun's offer to raise the price to $10.25 per share was considered inadequate by Taro's board, it was noted previously.

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

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

© 2015 Prospect News.
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