The Hindu Business Line : Resolution of legal spat with Taro will take time: Sun Pharma

Mumbai, July 29 The resolution of the overseas litigation with Israeli drug-maker Taro Pharmaceuticals will take time, cautioned Sun Pharmaceuticals’ Chairman and Managing Director, Mr Dilip Shanghvi.

Going by the behaviour of Taro and its directors and their penchant for court cases, the resolution of the legal spat looks unlikely to get over soon, he cautioned. Sun Pharma has several options to protect its interest and remains committed to completing the acquisition of Taro, he told analysts on Tuesday.

Sun Pharma and Taro have been locked in a spat after Taro unilaterally terminated Sun’s $454 million proposal to acquire Taro. The deal was not without hiccups from the beginning, as minority shareholders Templeton and Brandes were unhappy with the price of $7.75 a share that Sun had offered. And though Brandes’ equity was subsequently bought by Sun for $10.25 a share, Taro terminated the deal in May this year, precisely a year after it was formalised.

Mr Shanghvi said an out-of-court settlement seemed unlikely too, as “if there was a possibility from our side, it would not have gone into litigation”. However, he did not completely rule out any possibility, as anything can happen in business.

On Monday, Taro sent another letter to its shareholders asking them not to respond to Sun Pharma’s ongoing open-offer. Sun has exercised its rights as per the Option Agreement to acquire all the shares held by the controlling shareholders of Taro Pharmaceuticals, at $ 7.75 a share.

Further, in compliance with terms in the agreement, a tender offer at the same price was commenced for all ordinary shares of Taro. This is set to conclude on September 2, after the date got extended on the recommendation of the Tel Aviv District Court.

This extension allowed the court to rule on the merits of the litigation commenced against Alkaloida (a Sun subsidiary) and its affiliates by Taro regarding the applicability of the special tender offer rules under the Israeli Companies Law to the tender offer.

Meanwhile, Sun Pharma also filed a suit against the entire Taro board of directors in the Supreme Court of New York for fraud, urging the Court to order Taro that the terms of the Option Agreement be followed.

Effexor delay

Mr Shanghvi also said that there could be a delay in the launch of its generic anti-depressant Effexor in the US, due to a citizen’s petition filed by the US-based Osmotica Pharmaceuticals.

Sun Pharma shares were marginally up, at Rs 1,404.95 on the BSE.

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