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Sun Pharma In The News

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Israel Court Clears Way For Sun's Taro Buy

 

The Israeli Supreme Court's (SC) Tuesday ruling in fa'vour of Sun Pharmaceutical Industries Ltd draws the curtains on the Indian drug maker's three-year-long legal battle to consummate a 2007 merger deal with Taro Pharmaceutical Indus'tries Ltd. The takeover battle started with Taro unilaterally terminating a May 2007 merger deal exactly a year after inking it.
 
Armed with the court decision, Sun Pharma can now claim the controlling stake in Taro, held by promoter Barrie Levitt, his family and their associates under an option agreement. It is not known whether Taro Pharma will appeal against the SC order.
 
The Sun Pharma stock rose 2.05% on Wednesday to close at Rs.1,756.25 on the Bombay Stock Exchange even as its benchmark Sensex index remained almost flat. At the time of writing, the Taro share was at $11.63 (Rs.543) in over-the-counter trading in the US, 2.08% higher than its Tuesday price.
 
Sun Pharma, which holds about 36% of Taro Pharma, has been fighting a legal battle since May 2008, when the latter terminated a $454 million deal, saying it undervalued the company.
 
As per the original agreement, Taro Pharma, a Tel Aviv-based ailing drug maker with accumu'lated losses at the time, was to be merged with Sun Pharma. But the deal that valued Taro Pharma at $7.75 a share got stuck as its management dragged the Indian firm to courts in Israel and the US.
 
Sun Pharma, aggressive on global expansion in the generic drug space, found the loss-making Taro Pharma, with its pres'ence in the US and parts of Europe and Asia, a good fit for its strategy of turning around sick companies after acquisition.
 
Taro Pharma, however, after turning around on its own in a year, believed it had the potential to command a higher value. Israel's SC, which was hearing an appeal filed by Taro Pharma to block Sun Pharma from exercising the option agreement that forces Levitt and family to surrender their shares, and thereby losing control of the company, unani'mously dismissed the appeal on Tuesday