Appeal keeps Sun Pharmaceuticals from closing tender offer for Taro

By Lisa Kerner

Charlotte, N.C., Sept. 10 - Taro Pharmaceutical Industries Ltd. said it has appealed a lower court's decision to the Supreme Court of the State of Israel.

The Israel Supreme Court issued a stay of the lower court ruling precluding Sun Pharmaceutical Industries Ltd. from closing its $7.75-per-share tender offer for Taro's shares until the appeal process is completed, according to a Sept. 10 letter to Taro stockholders.

Taro said the Israel Supreme Court will hear arguments on the matter on Dec. 8.

In May 2007 Taro 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. Taro terminated the deal on May 28.

Sun previously announced it extended its tender offer for Taro shares to 5 p.m. ET on Oct. 3 from Sept. 3. Originally the offer was to have ended in July.

The Tel-Aviv District Court had previously ruled in favor of Sun that a special tender offer was not required, Sun said. Taro's controlling shareholders, led by company chairman Barrie Levitt, were ordered to deliver their shares under their option agreement with Sun.

Levitt and the controlling shareholders granted Sun an option to acquire all their shares, including the founders' shares, if a merger of the two companies was not consummated under the May 2007 agreement, a prior news release said.

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

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

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