Israel?s Taro Pharmaceutical Industries has decided to appeal to the country?s Supreme Court in Tel Aviv against last week?s decision by a district court (DC) in favour of Sun Pharmaceuticals. Last week, dismissing Taro?s argument, the Tel Aviv DC had said that there was no necessity for a special tender offer from Sun Pharma as demanded by Taro for the former to acquire all outstanding shares of the latter.
In order to permit proper dissemination of the proposed amendment, Alkaloida, Sun?s subsidiary, had extended the expiry date of the tender offer by 5 pm, New York City time, on September 3. The offer had been scheduled to expire at midnight on July 28.
Following the Tel Aviv DC verdict, Sun is to file an amendment to its previously announced tender offer by Alkaloida. The amendment provides for the waiver of certain conditions to the tender offer, including the condition that the controlling shareholders of Taro have performed their obligations under their option agreement with Sun, the company had said.
According to Israeli newspaper Globes, Taro would also ask the Supreme Court to further extend the deadline for Sun?s offer. If the court agrees, this will also postpone the date at which Taro chairman Barrie Levitt and his family will have to sell their founders? share to Sun. When contacted, a Sun Pharma spokesperson refused to comment. In June, in his letter to shareholders, Barrie Levitt said, ?The company has been advised by its Israeli counsel that Sun?s offer is required to, but does not, comply with the ?special tender offer? rules under Israeli law that provide important protections to minority shareholders and that, therefore, Sun?s offer is illegal.? As per Israeli law, the tender offer to purchase the shares will be accepted only if at least half the shareholders agree to sell their shares at the offer price.
Tel Aviv DC Judge Michal Agmon-Gonen ruled that it was disingenuous for Taro?s directors to claim now, over a year after they approved the transaction, that an SPO was required. The directors should have studied the agreements prior to their being signed, and should have confirmed then that they were in the company?s best interests, the judge opined.