Sun launches fresh talks with Taro promoters

Indian drug major Sun Pharmaceuticals, which is in the process of acquiring Israel-based Taro Pharmaceutical, has initiated fresh talks with promoters Levitt and Moros families and other shareholders, who hold the balance 64% stake in Taro. Sun Pharma has extended the tender offer to April 3, following the developments.

Taro Pharmaceutical, a leading generic companies operating in the US market, had sought a 58% premium, or $15 per share, in cash to effect a merger with Sun Pharma. However, the Indian major rejected the offer claiming it was beyond the worth of Taro, which did not disclose audited results for three years and restated accounts.

On the other hand, Sun’s offer was a maximum of $9.50 per share with two options. As earlier rounds of discussions had failed, both parties demanded the court to give a verdict. However, the court directed Sun Pharma and Taro to re-negotiate through a mediator. Sun’s tender offer is at a price of $7.5 per share.

The tender offer, which was triggered by Sun Pharma in June 2008 following the failure of a merger agreement, was to expire on March 20. The Indian major extended the offer that is expected to expire on April 3, unless further extended or earlier terminated.

The offer was extended to comply with an order issued by the Israeli Supreme Court prohibiting the closing of the offer until the SV issues a decision on the appeal.