Taro starts tender offer to buyback $200 mn of shares

Sun Pharma's stake in Taro will go up to more than 69-71% up if buyback is fully subscribed

Taro Pharma, Israel-based subsidiary of Sun Pharmaceuticals, has started a tender offer to buy back up to $200 million of its ordinary shares.

If the offer is fully subscribed, the number of Taro Pharmaceutical shares to be purchased in the offer represents approximately 4.6% to 5.3% of the unit's total outstanding shares.

Sun Pharma's stake in Taro will go up to more than 69-71% up if the buyback is fully subscribed. As on 31 March 2013, Sun Pharmaceutical Industries held 65.89% stake in Taro Pharmaceutical Industries.

On Tuesday, shares of Sun Pharma closed at Rs 573.30, down by Rs 7.25 or 1.25% on BSE.

For FY13, Taro’s sales were $671 million, a growth of 24%. Taro’s net profit for FY13 was at $266 million. Taro contributed around 28% of Sun's total sales in FY2013. For FY13, Sun had posted a net sales of Rs 11,239 crore.

According to Taro, offer is at a price not greater than $97.50 nor less than $84.50 per share. The NYSE closing price of Taro ordinary shares on November 22, 2013, the last full trading day before announcement and commencement of this tender offer, was $89.57 per share, it added. The offer will expire on December 23, 2013.

Taro is to use a portion of its cash and cash equivalents and short-term bank deposits to fund the tender offer. As of October 31, 2013, Taro had approximately $741 million in cash and cash equivalents and short-term bank deposits.