Sun has also extended the deadline for its tender offer for the purchase of all outstanding shares of Taro to January 30. The tender offer was extended to comply with a Supreme Court of Israel order temporarily prohibiting the closing of the offer until the Court decides on a pending litigation.

The unending Sun Pharma-Taro spat has taken another turn. Following Taro rejecting Sun Pharma?s settlement proposals on January 6, Dilip Shanghvi, managing director of Sun Pharma, in his latest letter to Taro chairman Barrie Levitt, accused Taro of diverting public attention from the fact that Taro is unwilling to negotiate with Sun. On Wednesday, Sun Pharma shares closed at Rs 1,041.40, up by 0.02%.

?Under the option proposed by Taro, if the merger gets rejected, then the Levitt/Moros family keeps their shares. We have always believed that Taro and its outside directors were working to protect only one interest: of Levitt/ Moros family. After Sun rescued Taro, Levitt/Moros family members agreed to sell their shares to Sun,? Shangvi said in his letter.

?The referendum structure, mentioned in your letter has no legal basis or support. It is impractical and ignores all of our existing agreements.

It is evident that this totally absurd proposal was made for the sole reason of confusing the public to a point of believing that Taro is actually trying to negotiate settlement,? Shangvi added. Taro had said Sun Pharma was unwilling for negotiation and proposed merger at a price of $15 per share. Shangvi said, ?Your letter, sent on the 29th day of the negotiation period, proposing a merger at an 82% premium to market, is clearly just another unfortunate attempt to justify a request to delay a ruling by the court.? He said the proposal is beyond the worth of Taro, which did not disclose audited results for three years. ?Today marks 30 days since the date of hearing in the Israeli Supreme Court and Sun is yet to receive a single worthwhile proposal from Taro for the transaction,? said Sanghvi.

Shanghvi has already sent two letters to Taro shareholders and its audit committee chairman, in which Sun has proposed to increase the offer price to $9.5 per share, for the $7.75 per share it had offered earlier. Rejecting Sun Pharma?s proposals by terming it ?financially inadequate?, Taro had suggested proposal for shareholder referendum, where shareholders would vote on a merger between the companies at an offer price of Sun?s own choosing. In May 2008, Taro had unilaterally terminated the $454-million merger agreement signed between Taro and Sun Pharma in 2007, citing undervaluation of its shares.

Thereafter, both companies filed suits against each other in Israel and New York. Pursuant to the litigation, Sun Pharma also launched an open offer at $7.75 per share to acquire additional stake in the company, which was again challenged in the Israeli Supreme Court. The Israeli court suggested that both parties try to solve the issues through negotiations, while barring Sun from closing the open offer.

Dispute call

• Taro asks Sun to pay $15 a share for merger

• Rejects the $-9.5 per share offer proposed by Sun

• Shanghvi accuses Taro of diverting public attention from Taro?s unwillingness to negotiate with Sun