The Hindu Business Line : Taro files another case against Sun Pharma

Mumbai, June 20 Irish drug-maker Taro has filed a second case against Sun Pharmaceuticals to prevent the Mumbai-based drug company from taking any action that could undermine Taro’s efforts of selling its Irish plant.

Taro’s intention to sell its Irish plant is the latest sparring point between Sun Pharma and Taro, after the latter had unilaterally terminated Sun’s $454-million merger proposal.

Taro’s letter to its shareholders, explaining the developments around the Irish plant, comes within a fortnight of Sun Pharma expressing its unhappiness on Taro’s intentions. Sun Pharma had even threatened to publish advertisements in Irish newspapers to notify potential buyers.

“To protect the interests of Taro and our shareholders, on June 15, we commenced litigation in Israel to stop Sun from engaging in practices that we deemed detrimental to our ability to maximize the value of the Irish operations in a sale,” Taro said. Sun Pharma too could purchase Taro’s Irish operations, it added.

However, Sun Pharma has in the past said that Taro was aware of Sun’s views on the Irish facilities, as it had a strategic importance and 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.

Meanwhile, Taro said that its board believed that the sale of its Irish operations is in the best interest of the company and will substantially improve our profitability and cash position.

Earlier in May, in conjunction with the termination of the merger agreement, Taro had file an action in Israel seeking, among other things, a declaratory ruling that if Sun attempts to purchase Taro shares in an amount that would increase its voting power to more than 45 per cent, it must comply with the Special Tender Offer rules under Israeli law, which provide important protections for minority shareholders.

Sun Pharma has in the past maintained that the two companies stick to the terms of the agreement. Sun holds over 34 per cent in Taro. It did not want to comment on the latest salvo from Taro.

Sun Pharma shares were marginally down on the BSE at Rs 1,472.4.