The Israel Supreme Court has directed Sun Pharmaceutical and Taro Pharmaceutical to re-negotiate to resolve the differences on the attempts of the Indian drug major to takeover the Israeli company.
Sun Pharma today said both camps, including the Taro promoter Barrie Levitt and Moros families, agreed to a mediation process to resolve the dispute, based on the recommendation of the Supreme Court three days ago. If no agreement is reached, any of the parties can request the Supreme Court to issue a judgment on the dispute.
"We are not in a position to reveal further details of the negotiations and mediation," said a Sun Pharma spokesperson.
Earlier, the Supreme Court had allowed both camps time till January 7 for an out of court settlement. Sun and Taro informed the Supreme Court that those negotiations were unsuccessful. Taro had demanded a 58 per cent premium, or $15 per share, in cash to effect a merger with Sun Pharmaceutical during the negotiation rounds. Sun Pharma rejected the offer citing it was beyond the worth of Taro.
Sun Pharma also said it has extended its tender offer till March 6. The offer to acquire the remaining 64 per cent outstanding shares of Taro, was set to expire on January 30. The court had directed Sun not to close the tender offer till the court settles the matter.
In May 2008, Taro Pharmaceuticals terminated the $454 million merger deal with Sun Pharma. Sun challenged it in the US and Israeli courts and triggered an open offer to acquire Taro's outstanding shares. Taro and some of its directors appealed in the Supreme Court against the applicability of the special tender offer rules under the Israeli Companies Law to the offer. This was after a Tel-Aviv District Court ruled in favor of Sun that a special tender offer was not required.