Sun Pharmaceuticals opposes Taro's sale of Irish assets

By Lisa Kerner

Charlotte, N.C., June 5 - Sun Pharmaceutical Industries Ltd. responded to news that Taro Pharmaceutical Industries Ltd. was considering a sale of its Irish operations, stating 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."

In a June 5 letter to Taro, Sun said the Irish operations represent a "significant future business opportunity" for Taro.

The letter was included as part of a schedule 13D filed with the Securities and Exchange Commission.

Sun believes Taro shareholders should question the board's motivation for divesting of the Irish facilities or other company assets if the buyers have close ties to Taro's senior management.

In the letter, Sun once again disputed Taro's termination of the merger agreement with Sun.

Sun said it would not simply stand by if Taro strips the company of "assets of strategic importance to the company's future operations and that Sun could possibly have preserved and developed had the merger agreement not been wrongfully terminated."

On May 29, Sun said that despite the company's claims to the contrary, Taro is not entitled to terminate its merger with Sun.

Taro announced on May 28 that its board of directors unanimously voted to terminate the May 18, 2007 merger agreement with Aditya Acquisition Co. Ltd., a Sun subsidiary.

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.

Either party could terminate the agreement after Dec. 31, a Taro news release said.

According to Taro, the agreement had become "stale" and does not reflect the "dramatic operational and financial turnaround" achieved by the company.

Sun's offer to raise the price to $10.25 per share was also 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.

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