Drug-maker Taro Pharmaceutical Industries has postponed its extraordinary general meeting of shareholders scheduled for December 6, to take-up the proposed merger of Taro with a subsidiary of Sun Pharmaceutical Industries.
Sun Pharma holds 66 per cent equity in Taro. Earlier this year, it had sweetened its proposal to shareholders to mop-up the remaining shares in Taro. And if the revised deal went through, Sun had plans to delist Taro from the New York Stock Exchange. Sun’s $454 million acquisition of Taro has been a rocky process, with cross-country litigation fought over three years.
In its revised deal, Sun had said that all shareholders of Taro other than Sun Pharma and its affiliates would receive $39.50 per share upon the closing of the merger. This deal had the approval of the Taro board, unlike Sun’s earlier proposal of $24.50 per share.
But the revised deal still needs shareholder approval and with Taro’s financial performance looking up, a section of minority share-holders in Taro are unhappy with the proposal from Sun.
In fact, minority shareholder Grand Slam Capital Master Fund has filed a case in the United States District Court, Southern District of New York, against Taro board and directors, for what they call an unfair deal, and for violating US Securities and Exchange Act and US Securities and Exchange Commission (SEC) rules, according to overseas media reports.