Sun Pharma wins case against Taro

Drug-maker Sun Pharmaceutical on Wednesday said it has won a case in Israel filed against it by Taro regarding an open offer for the latter.

Sun Pharma, in a filing to the Bombay Stock Exchange, said that the 'Tel-Aviv Court on Tuesday has rejected Taro's contention that Sun Pharma should have conducted a special tender offer under Israeli Law.'

Last month, the Mumbai-based firm had launched an open offer at a price of $7.75 per cent to acquire all outstanding shares of Israel-based Taro, including all of the founders' shares.

However, the directors claimed that a special tender offer is necessary and filed a lawsuit with the Israeli court.

Sun Pharma would be in a position to complete the previously announced tender offer by its subsidiary, Alkaloida Chemical Company Exclusive Group Ltd (Alkaloida), it added.

The open offer which opened on June 30, would now expire on September 3, instead of September 2, it added.

'The court stated that 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 interest. The court stated that the directors cannot claim now that they suddenly decided a special tender offer is necessary,' it added.

Sun Pharma chairman and managing director Dilip Shanghvi said, "It is clear based on yesterday's ruling that the lawsuit by Taro's independent directors was part of a calculated effort by Barry Levitt to avoid living up to his obligations under the Option Agreement."

With respect to those directors who are also shareholders, the court stated that 'these shareholders benefited from Sun's investment, which basically saved Taro from collapse.'

Further, Sun Pharma will file an amendment to the previously announced tender offer which provides for the waiver of certain conditions in the offer.

The condition would include that the controlling shareholders of Taro have performed their obligations under their option agreement with Sun Pharma.

The court also ordered Taro and other plaintiffs to pay Sun Pharma's costs related to the litigation, the filing said.

Earlier, Sun had reiterated that Alkaloida exercised its option under the agreement, to acquire all the shares held by the controlling shareholders of Taro under the option agreement signed with Taro when the merger deal was struck last year.

Taro's controlling shareholders led by Barry Levitt had then granted Sun Pharma an option to acquire all the shares including the founders' shares.

Sun Pharma's open offer followed Taro's 'unilateral' termination of the $454 million merger agreement signed between the two firms.