Sun Pharmaceutical today said that a US court has dismissed a litigation filed by Israeli drug firm Taro to block an open offer launched by the domestic pharma major to acquire shares of the Tel Aviv-based company.
"The US district court for the Southern District of New York had dismissed in its entirety the complaint filed by Taro Pharmaceutical Industries Ltd, seeking to block the tender offer by Sun's subsidiary Alkaloida Chemical Company Exclusive Group to purchase all outstanding ordinary shares of Taro," Sun Pharmaceutical said in a statement.
Sun Pharma is the single-largest shareholder in Taro with over 35 per cent stake. It has been trying to wrest control over Taro ever since their $454-million merger deal in 2007 was unilaterally terminated by the Israeli firm a year later, citing undervaluation.
After this, both the companies filed cases against each other and the matter lay pending in the Israeli Supreme Court.
Alkaloida Chemical had launched an open offer in 2008 for acquiring additional shares of Taro. After this, Taro had filed a litigation against the Indian firm in a US district court to block its open offer.
"The court also dismissed Taro's other claims, including breach of contract and misappropriation of trade secrets, for lack of subject matter jurisdiction," the statement said.
The Indian firm claimed that the court has given two weeks' time to Taro for filing an amended complaint in an attempt to fix the defects in its earlier petition.
"However, even if Taro revives its state law claims, they will not entitle Taro to obtain the injunction it was seeking to enjoin consummation of Alkaloida's offer," Sun Pharma claimed.
Earlier, the open offer was challenged in the Israeli Supreme Court, which prohibited the Mumbai-based company from closing the offer until a ruling was delivered in other cases related to the takeover.
Sun said Alkaloida's offer remains subject to a continuing order issued by the Supreme Court of Israel, temporarily prohibiting the closing of the offer until the court issues a decision on the appeal of a separate litigation commenced against Alkaloida and its affiliates by Taro.
Commenting on the development, Sun Pharma Chairman and Managing Director Dilip Shanghvi said, "Sun is pleased, but not surprised, by this decision."
Sun Pharma shares were trading flat at Rs 1738.90, down 0.28 per cent from the previous close in the afternoon trade.
