US fund manager Templeton AMC, a minority shareholder in Taro Pharmaceutical Industries Ltd. (Pink Sheets: TAROF), is open to selling its take in the company, in contrast to the position of India's Sun Pharmaceutical Industries Ltd. (BSE: 524715).
Templeton owns 10% of Taro, and has opposed Sun Pharmaceutical's attempt to take over the company for years. Six months ago, however, Templeton changed its mind, and withdrew from the Taro's legal proceedings against Sun. Templeton chairman Mark Mobius said at the time that, with good management, Taro could achieve a higher price in the future. He added that Sun's management could make that happen.
In the wake of yesterday's announcement by Taro that Guggenheim Securities LLC had found buyers will to buy the company at $15 per share, compared with its current market price of $13.50, Mobius told India's "Economic Times" today, It is all a matter of price."
Mobius added, "Obviously what’s happening is that the conditions at Taro are improving dramatically as they are able to continue to get the accounts in order. The accounts were missing for a number of years, now they exactly get those in order."
Mobius said that Taro's sales seem to be improving, and so the company was worth more. "Guggenheim apparently is working on behest of the Taro owners, Taro controllers, so it looks like they are now realizing that the company is worth a heck of a lot more than what they sold it for and, therefore, want to close the impasse." He added that it looks like Taro management will lose the legal proceedings underway in Israel, and that Taro's management wasn’t to be in a position to buy back the shares from Sun if that happens.
Mobius said that Templeton would sell its stake in Taro for a fair price; that had always been the company's policy. "We would be happy to sell to whoever is going to give us that fair price."
Sun Pharmaceuticals owns 40% of Taro, and Taro chairman Dr. Barrie Levitt has been waging a three-year battle against Sun to block the takeover after he unilaterally cancelled the sale of the controlling interest in Taro to Sun.
Published by Globes [online], Israel business news - www.globes-online.com - on June 3, 2010
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