Sun Pharma on Thursday received a severe setback in its fight for control of Israel?s Taro Pharma, with Taro?s board of directors concluding that Sun?s tender offer for all of Taro?s outstanding shares was financially inadequate and a ?sham? offer that violates Israeli law. The Taro board has also unanimously recommended that shareholders? reject Sun?s offer and not tender any of their shares. Moreover, Taro said it is considering the buyout offers from other firms.
?In order to gain control of Taro without paying a fair price to the shareholders, Sun is now making a ?low-ball? offer. We believe Sun knows that it will not be accepted by the shareholders,? Taro Pharma said in its statement.
The company has been advised by its Israeli counsel that Sun?s offer is in violation of the Israeli Companies Law-1999. It is required to, but does not, comply with the special tender offer rules under Israeli law that provide important protections to minority shareholders and therefore, Sun?s offer is illegal. Accordingly, the board recommends that Taro shareholders reject Sun?s offer and not tender any of their shares, it added. The company?s stock was up 0.37% to close at Rs 1,321.70.
On June 28, FE had reported that Sun?s plan to acquire the shares held by the promoters of Taro through tender offer is not likely to take place as per the rules in Israeli law. Earlier Taro had told a Tel Aviv court that Sun Pharma?s tender offer must comply with the special tender offer rules under Israeli law.
?At least two potentially interested purchasers have expressed interest at a price level in excess of the highest price Sun has ever indicated a willingness to pay. Understandably, these expressions of interest were and are subject to due diligence and other conditions. We are not opposed to a sale of the company, but, given the dramatic turnaround in our performance over the last year, we believe that superior and fair values are attainable. We will prudently consider all alternatives with a view towards acting in the best interests of all shareholders,? Taro said.
