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Our Bureau

Mumbai, March 31 All eyes will be on the Supreme Court of Israel, with mediation efforts between Sun Pharma and Taro Pharmaceutical coming a cropper.

Though all parties engaged in the mediation process regarding the takeover of Taro, as recommended by Israel’s Supreme Court, the attempts were unsuccessful and no agreement was reached, Sun Pharma told the Bombay Stock Exchange on Tuesday. The company now awaits a decision from the Supreme Court, it added.

The impasse between the two companies was triggered by Taro’s unilateral termination of Sun Pharma’s $454- million proposal to acquire it. The termination was announced a year after the deal was formalised in 2007, and subsequently, the transaction went into litigation in Israel and the US.

Sun Pharma has invested about $100 million in Taro and holds 36 per cent in the Israeli generic-drugs company. It will be looking for a quick resolution, as already the transaction has been delayed and more money and time is being spent on resolving this deal, as compared to a regular transaction, a pharma industry representative said.

It is in Sun’s interest to have the deal brought to a logical solution quickly, as other issues regarding Taro’s assets are emerging, said a pharma analyst, referring to the US Food and Drug Administration’s warning letter on quality issues regarding Taro’s Canadian plant.

The bone of contention between the two companies was Sun Pharma’s original offer price of $7.75 a share, when the deal was sealed. Sun did manage to settle the price issue with some disgruntled shareholders, but the deal has since gone through various revised prices, including a Sun proposal to up price to $9.50 a share. But this too, appears to have fallen through, as Taro’s promoters quoted an offer price of $15 a share.

With no deal in sight, both companies now seek a decision from the court. Sun Pharma shares were up close to 3 per cent on the BSE, at Rs 1,112 on Tuesday.

More Stories on : Pharmaceuticals | Corporate Disputes | Mergers & Acquisitions | Overseas Investments | Sun Pharmaceutical Industries Ltd

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