In what could be termed as a turning point in the Sun Pharma-Taro acquisition deal, the Tel Aviv district court rejected Franklin Templeton’s demand to postpone Taro’s shareholders meeting to approve the deal, supposed to take place on July 23.
On Monday, Israel?s Supreme Court also rejected Templeton’s motion to postpone the shareholders’ meeting.
However, despite receiving a favorable court verdict, Sun Pharma has to wait for Taro shareholders? approval for the buyout, as Taro Pharma itself has postponed its shareholders’ meeting to September 25, in order to allow shareholders? additional time? to fully consider the proposed transaction with Sun Pharma.
According to media reports, the district court ruled that the share allocation to Sun could not be revoked, since it had relied on Templeton?s willingness to consent to a lowering of the price, and had paid a considerable sum for its shares.
Franklin Templeton had opposed Sun Pharma’s $454 million acquisition of Israel’s Taro Pharmaceutical. Templeton, which holds a 9% stake in Taro, said that Sun’s offer of $7.75 a share was too low and unjust to the minority shareholders of Taro. Brandes Investment Partners, the second-largest shareholder in Taro, had indicated that it plans to vote against the Sun acquisition. Templeton also sought a temporary injunction in a Tel-Aviv district court to prevent Taro from entering into the transaction.
A Sun Pharma statement said, ?Taro Pharma has decided to postpone the meeting, primarily out of concern that public statements made by some large institutional Taro shareholders and their representatives, and the numerous court motions filed by them – all of which were rejected on July 20 by the Tel Aviv District Court – may have caused confusion among shareholders.?
Even though Sun Pharma said that the court has rejected all of Templeton’s motions, it is not clear whether the court has rejected the motion to oppose the acquisition deal itself.