Responding to the letter sent by Barrie Levitt, chairman of Taro to Sun, Dilip Sanghvi, chairman and managing director Sun Pharma said, "Taro is not entitled to terminate the merger as per the agreement. We remain skeptical of Taro's turnaround. Taro has only $47 million in cash as of March 31,2008. This means that if not Sun's cash injections of approximately $60 million last year, Taro would have vitually negative cash, hardly the dramatic improvement of which Taro has boasted. While Sun has made every effort to fulfill its obligations under the merger agreement, Taro has failed to honour its side of the bargain and taken all necessary action consummate the merger. Further, Taro has ignored our attempt to discuss and put forward to Taro's shareholders an increase in the merger consideration in order to complete the transaction."
In a letter to Dilip Shanghvi, Sun's chairman, Barrie Levitt, chairman of Taro, had said Sun's revised offer to raise the merger price to $10.25 per share, subject to eliminating a voting threshold required by Israeli law to implement the merger, was not acceptable to the board. Sanghvi has responded to this letter. In a letter dated May 29, in light of Taro's actions, Sun Pharma will consider all its options including without limitation commencing legal proceedings.
