Sun Pharma To Try Hostile Takeover Of Taro

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divorce-decreeThis is as ugly as any divorce and they weren’t even married yet. The Indian drugmaker will try to force the controlling shareholders in Israel’s Taro Pharmaceuticals to sell their stake after a $454 million merger deal unexpectedly collapsed last month.

Sun is invoking a clause in which Sun was granted the option to buy all their shares if the merger fails,
according to a statement from Sun. “We have had enough of the delays, excuses and misrepresentation by the board of Taro and Dr. Levitt,” Dilip Shanghvi, Sun’s chairman, says in the statement in which he refers to Taro chairman Barrie Levitt. “We will do everything required to preserve our rights.”

In a statement explaining why it canceled the deal, Taro execs say a revised offer from Sun was inadequate given recent improvement in Taro’s operations. The two drugmakers are also squabbling over Taro’s plans to sell its Irish facility; Taro’s contention that Sun must make a separate offer under Israeli tender rules to protect minority shareholders and Sun’s claims that it has given Taro $60 million to speed a turnaround.

Taro recently filed an injunection in an Israeli court. And yesterday, Sun filed a lawsuit in the Supreme Court of the State of New York to order the controlling shareholders to honor the 2007 merger agreement, according to its statement.

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