Templeton reports 11.1% stake in Taro Pharmaceutical

By Lisa Kerner

Charlotte, N.C., Oct. 2 - Taro Pharmaceutical Industries Ltd. investor Templeton Asset Management Ltd. bought 426,700 shares of the company's stock between July 29 and Sept. 19.

According to a schedule 13D filed with the Securities and Exchange Commission, the shares were priced from $9.66 to $9.80 each.

Templeton beneficially owns 4,366,912 shares, or 11.1% of the shares outstanding. The investor reported a 10% ownership interest on July 10.

It was previously reported that Templeton believes Sun Pharmaceutical Industries Ltd.'s $7.75-per-share offer for Taro undervalues the company.

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.

Taro terminated the deal on May 28.

Sun then began a tender offer for the company on June 30. Closing of the offer has been stalled in the courts.

In September, Taro said it 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 from closing its $7.75-per-share tender offer for Taro's shares until the appeal process is completed.

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

The Tel-Aviv District Court had previously ruled in favor of Sun that a special tender offer was not required, Sun said in a prior news release. 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, it was previously reported.

Templeton is a wholly owned subsidiary of Franklin Resources, Inc., an investment management organization operating as Franklin Templeton Investments.

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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