In a letter to the Taro shareholders, Taro Chairman Barrie Levitt said on June 15, Taro commenced litigation in Israel to stop Sun from engaging in "practices that we deemed detrimental to our ability to maximize the value of the Irish operations in a sale". Taro Ireland, a Taro subsidiary which manufactures injectables, owns a multi-purpose pharmaceutical manufacturing and research facility in Roscrea, Ireland, which it acquired a few years ago.
A Sun Pharma spokesperson declined to comment on the developments. "We will inform the public and our share holders at the appropriate time on our actions," he said.
Last month, Taro had backtracked from more than a year old merger deal with Sun Pharma, citing the takeover offer made an year ago had become stale and the company turned around dramatically to post good results within a year of the agreement. Following this, both the companies accused each other publicly and Sun Pharma had threatened to sue Taro for invalidating the deal worth $ 460 million. Sun Pharma is the largest share holder in Taro with 34.4 per cent stake.
Sun Pharma continued its opposition to the sale and recently threatened to place advertisements in the Irish press opposing it, though the merger agreement was terminated, said Taro chairman.
Meanwhile, Taro offered Sun to submit an offer to purchase the Irish operations if it wishes to do so. "We will give any proposal submitted by Sun the same serious consideration that all bona fide offers receive," said Barrie Levitt.
In its letter to Sun Pharma on May 18, Taro had accused Sun Pharma of opposing its intentions to sell off its loss making Taro Ireland to a group of Irish investors, citing the merger agreement.
Sun Pharma claimed to oppose Taro's move mainly on concerns regarding the sale process, real estate value and the agreement in principle Taro reached with the Irish buyers significantly undervalued the Irish operations. Further, the Irish subsidiary of Taro presented Sun with a strategic and synergistic value as part of its merger. "The Taro share holders should oppose any plans to sell the assets, in the wake of current developments and the fact that the potential buyers have close ties to Taro's senior management," Sun had said in a statement.
