In the mailbox of Sun Pharma chairman and managing director Dilip Shanghvi there awaited new letter yesterday from Barry Levitt, chairman of Taro Pharmaceutical Industries Ltd. (Pink Sheets: TAROF.PK). The leter contained a new offer, whereby Levitt proposes, on behalf of the Taro board, that Sun should buy the shares in Taro for $15 each in cash. The price reflects an 82% premium over Taro's current market price, and is higher than the offers made by Sun last week, which were at $9-9.5 per share.
The original agreement between the two companies, signed two years ago, was for Sun to buy Taro for $7.75 per share. In May 2008, Taro cancelled the deal, and the two companies are now locked in a legal battle. Within a few days, the 30 day period allowed by the Supreme Court for the two sides to reach a compromise will end. For the time being, it looks as though a compromise is a long way off, as the gap between the two sides is wide.
In response to the letter, Sun applied to the Supreme Court for a ruling on appeal.
"At the very last moment (last night) Taro, for the first time, sent a proposal to Sun that included a financial element, this time to not within the outline put forward by the court," Sun wrote in its application. "This proposal presumably came after Taro realized that failing to make any financial proposal would put it in a negative light before the court. We would point out that the price named by Taro in its proposal is absurd and even vexatious, and so it cannot represent any kind of basis for discussion between the parties."
Published by Globes [online], Israel business news - www.globes.co.il - on January 7, 2009
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