The Sun Pharma-Taro fight seems to continue unabated, with Sun sending its second letter to Taro alleging that Taro had tried to deflect attention from the logic of Sun?s reasoning by accusing Sun Pharma of breaching their duty of good faith to Taro and its other shareholders. ?Our primary objection lies in what we believe to be the Taro Board?s mishandling of Taro Ireland,? Dilip Shanghvi, chairman and MD, Sun Pharma said in his letter to Taro chairman.
Taro had cancelled the $454 million merger agreement with Sun last month and last week, it had filed two law suits in Israel against Sun as it pressed to go ahead with the sale of its Irish business and prevent the Mumbai-based company from trying to gain voting rights through open market share purchase.
Shanghvi said, ?We made public our grave concerns about the proposed sale, not because we were trying to improperly interfere with Taro?s business, but because, as a shareholder and potential owner of Taro, we have no alternative means of alerting other shareholders to the unseemly circumstances of the proposed sale.?
?Our primary objection lies in what we believe to be the Taro Board?s mishandling of Taro Ireland. Your simplistic statements that Taro Ireland has been costing $800,000 per month to maintain and its sale will enhance Taro?s cash flows, are yet another example of an ill-considered approach by the same management that led Taro to the brink of insolvency in 2006-7, requiring Sun to invest nearly $60 million to rescue the company,? he added. While issuing warning to Taro to not to attempt selling of its Irish business, he said: ?Any action of this nature will force Sun to hold each of Taro?s directors personally accountable. Any potential buyer would also be entering into such a transaction at its own risk.?
?We find it telling that in conjunction with the unfavourable terms of the proposed sale, Taro failed to demonstrate a thorough and transparent sale process,? Shanghvi said in the letter.
