Sun Pharmaceuticals increased its stake in Taro Pharmaceutical Industries to 34.4% by purchase of 3,712,557 shares, equivalent to 9.4% stake.
These shares were bought by Sun Pharma?s indirect subsidiary, Alkaloida Chemical Company Exclusive Group Ltd, from Brandes Investment Partners.
In May 2007, Sun Pharma, together with its subsidiaries, had signed definitive agreements to acquire Taro Pharma.
Sun Pharma?s move becomes significant as Taro?s stake holders like Franklin Advisers Inc and Templeton Assets Management Ltd, who hold about 9% stake each, resisted Sun Pharma?s move to buy taro, citing the reason that Sun Pharma?s offer of $7.75 per share is low.
Sun had agreed last May to buy Taro Pharma for about $454 million, to boost revenue from the US generic market. Earlier, the Tel Aviv District Court had dismissed Franklin Templeton?s plea to block the sale of Taro Pharma.
For the year ended December 31, 2007, Taro estimates net sales of approximately $313 million, gross profit of approximately $168 million, or 53.7% of sales, and net income of approximately $21.1 million.
In fact, Sun Pharma has to wait for a clear picture on taro buyout till the Taro Pharmaceutical?s shareholder meeting to vote on the proposed merger with Sun, which is expected to be held in the first quarter of 2008. The meeting was supposed to take place in October or November. In July, Sun released Taro from its non-solicitation agreement, allowing it and investors to consider other offers.
Taro has a good presence in dermatology segment, in addition to product baskets in cardiovascular, neuropsychiatric and anti-inflammatory therapeutic categories. It has established subsidiaries, manufacturing and products across US, Israel, Canada and North America.