The Hindu Business Line : Sun Pharma extends offer for Taro till Sept 2

Mumbai, July 15 Sun Pharmaceutical Industries Ltd has extended the tender offer for purchase of all outstanding ordinary shares of Israel’s Taro Pharmaceutical Industries Ltd up to September 2.

The offer had started on June 30, after Sun Pharma decided to push through with its hostile bid for Taro’s outstanding ordinary shares. Sun’s decision had had been triggered by Taro’s unilateral termination of Sun’s $454-million merger proposal.

Executed through Sun Pharma’s wholly-owned Hungary-based subsidiary Alkaloida Chemical Company Exclusive Group Ltd, the offer was scheduled to close on July 28. As of July 11, 700 ordinary shares had been tendered and not withdrawn from the offer, the note said.

The extension of the offer’s expiry date was recommended by Judge Dr Michal Agmon-Gonen J of the Tel-Aviv District Court in order to allow the court to rule on the merits of the litigation commenced against Alkaloida and its affiliates by Taro and certain of its directors regarding the applicability of the special tender offer rules under the Israeli Companies Law to the offer, a Sun Pharma note said.

The recommendation for extension was agreed upon by all parties to the litigation, it added.

Alkaloida’s pact

Sun Pharma had pushed through with the offer to comply with the terms of the option agreement between Alkaloida and the controlling shareholders of Taro. Alkaloida exercised its options to acquire shares of Taro from the controlling shareholders in late June, and as per the option agreement Alkaloida had to go in for the offer soon after.

Greenhill & Co, LLC is the dealer manager for the tender offer and MacKenzie is acting as the information agent for the offer, the company said.

Public spat

Sun Pharma’s extension today comes within days of Taro’s board asking its shareholders to reject Sun’s offer as it was “financially inadequate”. Since Taro terminated the merger agreement, a year after it was initially forged, the two companies have been involved in a public face-off. The final flash-point was Taro’s intention to sell its Irish plant, an asset that Sun Pharma saw was integral to the deal.

And while Sun Pharma has suits filed against it by Taro in the Israeli court, Sun too has hauled the board of directors at Taro to the Supreme Court of New York for fraud, besides urging the Court to order Taro that the terms of the Option Agreement be followed.

Sun Pharma at present holds 36 per cent in Taro, and by exercising its option to acquire the controlling shareholders’ shares, 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.

Sun Pharma shares closed down two per cent, at Rs 1,309.65 on the BSE.