The Hindu Business Line : Sun Pharma starts tender offer for Taro’s shares

Sun Pharma at present holds about 36 per cent in Taro, and by exercising its option, it would get 12 per cent of the economic share, taking its share up to 48 per cent.

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Mumbai, June 30 Sun Pharmaceutical Industries Ltd said that its subsidiary, Alkaloida, has commenced a tender offer for all outstanding ordinary shares of Israeli drug-maker Taro Pharmaceutical Industries Ltd, for $ 7.75 per share in cash.

Alkaloida Chemical Company Exclusive Group Ltd has exercised its option under its Option Agreement to acquire all the shares held by the controlling shareholders of Taro, Sun Pharma said.

The tender offer is scheduled to expire at midnight, New York time, (on July 28, 2008), unless the tender offer is extended, Sun Pharma said. The development is a follow through of last week’s decision by Sun Pharma to go ahead and make a hostile bid to acquire the equity of controlling shareholders in Taro, after the latter had unilaterally terminated Sun’s $454-million proposal in May this year.

Sun Pharma at present holds about 36 per cent in Taro, and by exercising its option, it would get 12 per cent of the economic share, taking its share up to 48 per cent. Sun Pharma’s voting shares would go up to 65 per cent.

The tender offer is not conditioned on the availability of financing or the approval of the Taro board, Sun said, and added that the complete terms and conditions of the offer will also be filed on Monday with the US Securities and Exchange Commission.

In May last year, Taro and Sun Pharma’s subsidiaries had entered into a merger agreement where Sun Pharma’s subsidiary was to acquire Taro, a decision that Taro’s board of directors had unanimously approved, Sun said. In the event the merger was not consummated, Taro’s controlling shareholders led by Taro’s Chairman, Mr Barrie Levitt, granted Sun Pharma an option to acquire all their shares, including all the founders’ shares of Taro, it added. In May this year, though, Taro unilaterally terminated the merger agreement, an action that Sun has challenged in the Supreme Court of New York.

Sun Pharma shares were up over four per cent on the BSE, at Rs 1,392.55, on Monday.