Taro blames Sun Pharmaceutical for lack of merger negotiations

By Lisa Kerner

Charlotte, N.C., Jan. 6 - Taro Pharmaceutical Industries Ltd. said that contrary to public statements, it is Sun Pharmaceutical Industries Ltd., and not Taro, that is refusing to negotiate and resolve issues stalling a merger of the two companies.

According to Taro, Sun refused its latest proposal to engage in mediation as well as the company's offer to put Sun's merger proposal to a vote of Taro public shareholders.

Taro said if Sun "was truly serious about its $9.50 proposal" and confident that Taro shareholders would accept the offer, Sun would not have rejected Taro's offer to put it to a shareholder vote. The offer has been unanimously rejected by Taro's board of directors.

Sun had offered $10.25 per share for Taro in April 2008 and $7.75 per share for the company in July 2007.

In addition, Taro said Sun seems to be unwilling to include Templeton Asset Management Ltd., Taro's largest public shareholder, in any discussions.

"Templeton is a party to the lawsuit pending before the Israeli Supreme Court, and has nearly enough shares to veto a merger all by itself," Taro said.

Taro said that while Sun can choose face-to-face negotiations, a shareholder vote or mediation under the auspices of the Israeli Supreme Court, it has "only been willing to make low-ball offers and 'negotiate' through the press."

It was previously announced that Sun subsidiary Alkaloida Chemical Co. Exclusive Group Ltd. extended the expiration date of its tender offer for the outstanding ordinary shares of Taro to 5 p.m. ET on Jan. 9 from Dec. 19. Sun has extended the expiration date of its tender offer for Taro several times since the offer began on June 30, 2008.

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

The Tel-Aviv District Court ruled in favor of Sun that a special tender offer was not required. However, the Supreme Court ordered the parties to negotiate a settlement within 30 days before the court renders a judgment.

In May 2007, Taro agreed to be acquired by Sun in a deal valued at $454 million including the refinancing of about $224 million in net debt. The deal was terminated by Taro roughly one year later, a prior news release said.

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.

Mentioned in this article:

Sun Pharmaceutical Industries Ltd. Bombay: SUNPHARMA

Taro Pharmaceutical Industries Ltd. Pink Sheets: TAROF

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