Fresh round of talks to settle differences with Taro out of court begins.
Sun Pharmaceutical Industries, which is attempting a hostile takeover of Israel-based Taro Pharmaceutical, has extended the offer to acquire the remaining stake in the drug-maker to April 3. This came even as it launched a fresh round of talks to settle the differences with Taro out of court.
“The mediation process with Levitt and Moros families, initiated at the Supreme Court recommendation, is on,” said a Sun Pharma official, declining to give further details.
Independent sources said the negotiations were mainly on the revised price at which Sun Pharma could buy the shares of the promoters. Sun Pharma is attempting to acquire the remaining 64 per cent stake of the promoters, Levitt and Moros families, and other shareholders.
Taro Pharmaceutical, one of the largest generic companies operating in the US, had demanded a 58 per cent premium, or $15 per share, in cash for a merger with Sun Pharmaceutical Industries. However, Sun Pharma rejected the offer citing it was beyond the worth of Taro, which did not disclose the audited results for three years and restated its accounts.
Sun’s offer was a maximum of $9.50 per share with two options. Thus, the earlier rounds of discussions failed and both the companies urged the court to give a verdict. However, the court directed Sun Pharma and Taro to re-negotiate through a mediator. Sun’s tender offer is $7.5 per share.
Sun Pharma Managing Director Dilip Shanghvi and Taro Chairman Barrie Levitt met in Israel last month to discuss a compromise in the presence of advocate Ram Caspi, who is mediating, Israeli newspapers had reported a few weeks ago.
The offer, which was triggered by Sun Pharma in June last year following the failure of a merger agreement, was to expire on March 20. Sun Pharma said the offer would expire on April 3, unless further extended or earlier terminated. The offer was extended to comply with an order issued by the Supreme Court of Israel, which temporarily prohibited the closing of the offer until the Supreme Court issued a decision on the appeal. Taro and its directors had challenged the applicability of the special tender offer rules under the Israeli companies law.
The Israeli company had backed out from a $454 million merger deal signed in May 2007, citing that the fortunes of the company had turned around since the merger plan. Following this, Sun Pharma sued Taro in the Supreme Court of New York for breaching the agreement, while Taro challenged the validity of the tender offer in Israeli courts.
