Sun Pharmaceutical files suit, exercises option in merger agreement with Taro

By Lisa Kerner

Charlotte, N.C., June 25 - A subsidiary of Sun Pharmaceutical Industries Ltd. exercised the option under its option agreement to acquire all the shares held by the controlling shareholders of Taro Pharmaceuticals Industries Ltd., the company said.

It was also announced that Sun filed an action in the Supreme Court of the State of New York against Taro and its full board of directors alleging fraud.

Sun said it wants the court to order the controlling shareholders to honor their promises under the option agreement and to declare that the merger agreement between the companies was not properly terminated.

"We have had enough of the delays, excuses and misrepresentation by the board of Taro and [chairman Barrie] Levitt," Sun chairman and managing director Dilip Shanghvi said in a company news release.

As previously reported, Taro filed suit in Israel to keep Sun from preventing a sale of Taro's 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.

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.

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, it was noted previously.

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

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.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.