The Hindu Business Line : Sun Pharma buys 9.4% additional stake in Taro

Mumbai, Feb. 20 Even as Sun Pharmaceutical’s $454-million proposal to acquire Israeli-company Taro awaits closure, the Mumbai-based drug maker seems to have inched a little closer to sealing the deal.

Sun Pharma has purchased the shares of Brandes Investment Partners, one of the minority shareholders reportedly unhappy with Sun Pharma’s offer price.

Sun Pharma purchased an additional 9.4 per cent stake in Taro Pharmaceutical Industries Ltd, the company said, taking its stake in Taro up to 34.4 per cent from the earlier 25 per cent. The shares were bought by Sun Pharma’s indirect subsidiary, Alkaloida Chemical Company Exclusive Group Ltd, from Brandes Investment Partners LP, Sun Pharma told the Bombay Stock Exchange.

Sun Pharma bought 3.71 million shares for $10.25 apiece, an agency report said, citing Sun Pharma’s filing to the US Securities and Exchange Commission.

In May 2007, Sun Pharma had signed definitive agreements to acquire Taro Pharma, an overseas deal touted to be the second largest in the pharmaceutical space. But the deal ran into delays after minority shareholders Franklin Advisers and Templeton alleged discrimination against them and took legal recourse. San-Diego-based Brandes Investment Partners had also reportedly expressed disappointment with Sun Pharma’s offer price of $7.75 per share.

But with the Brandes issue being settled, the focus shifts to Taro’s annual shareholder meeting that was to be held in the current quarter, as indicated by Taro, to discuss Sun Pharma’s proposal.

Taro’s shareholder meeting to discuss the merger has already been rescheduled twice over and no date has been given yet by the company. Industry-representatives familiar with the development said that shareholder meeting would be a significant milestone in taking the deal forward, even as the Templeton issue awaits direction from the court.

Sun Pharma’s shares were down 4.65 per cent on the BSE, at Rs 1,068.25