Sun Pharma rejects Taro's offer of $15 a share
Sun Pharma and Taro Pharma still seem unable to resolve issues over their proposed partnership.
Taro has now proposed $15 per share in cash for a merger with Sun just a day before the out of court settlement deadline set by the Israel Supreme Court expires. Replying to the offer, Chairman and MD of Sun, Dilip Shanghvi said,
“Proposing a merger at an 82% premium to market is clearly an attempt to justify a delay to the court. The Taro board knows that $15 per share is way beyond what the company is worth.”
Sun feels Taro and its board are trying to protect the interest of Taro promoters – the Levitt and Moros families – and to avoid their obligation under the option agreement. Under the option agreement signed with the original merger agreement in May 2006, Taro promoters are bound to sell their shares to Sun Pharma at $7.75 apiece, even if the merger fails. In his letter, Shanghvi said the company would “not forgo the obligation of the Levitt family to transfer their shares to Sun Pharma for a never-before-attempted concept of a merger-referendum”.
Let’s see how this drama plays out before this weekend is out…
