The Hindu Business Line : Sun Pharma rejects Taro’s proposal for higher offer price

Mumbai, Jan. 7 With just hours to go for the deadline set by the Israeli Supreme Court to lapse, Sun Pharmaceuticals has rejected Taro’s suggestion asking the Mumbai drug company to up its offer price to $15 per share.

“Your letter of yesterday, sent at midnight on the 29th day of the negotiation period, proposing a merger at an 82 per cent premium to market, is clearly just another unfortunate attempt to justify a request to delay a ruling by the court. Taro board knows that its proposal of $15 per share is way beyond what the company is worth with no audited numbers for three years and with prior year restated numbers to be further restated.

“The fact that the board sent such a proposal knowing that Sun Pharma can never agree to it, is further a confirmation that the Taro directors are only rubber-stamping outrageous proposals that are convenient solely to Levitt/Moros family, but do not have any concern for the minority shareholders,” Sun’s Chairman and Managing Director, Mr Dilip Shanghvi, said in his letter to Taro’s management.

The public spat started after Taro unilaterally terminated Sun Pharma’s $454 million proposal to acquire it, a year after the deal was formalised in 2007, and subsequently, the transaction went into litigation in Israel and the US.

The deadline set by the Israeli Supreme Court to resolve the issue lapses on January 8. Sun Pharma had agreed to amend the merger agreement and increase its offer price to $9.50 per share, giving it 100 per cent control in Taro. The original offer price was at $7.75 per share.

In its second proposal to Taro, Sun Pharma raised its tender offer price to $9 for all non-Levitt shareholders. Meanwhile, Sun Pharma told the BSE that it has further extended the tender offer for Taro’s shares to January 30, unless the court rules otherwise.