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Sun Pharma In The News

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Sun gives up plan to gain full control over Taro

Sun Pharma has decided to give up on its efforts to acquire full control over its Israeli-subsidiary, Ta­ro Pharma. Both the companies announced on Friday that they have mutually agreed to terminate their merger agreement which was announced in August 2012. Sun Pharma will continue to hold 66.5% in the company, while the balance will be held by other shareholders like hedge funds. Sun Pharma had acquired Taro in 2007 for $454 million, and in 2011, first announced the intention to merge the company with itself and offered $24.5 per share to the shareholders (other than Sun Pharma and its affiliates). Shareholders did not show interest in the offer, which was subsequently revised a couple of times.

In its most recent offer, Sun Pharma sweetened the deal and increased the offer according to which share­holders would have received $39.50 per share upon the close of the merger. The mi­nority shareholders were looking at an increase beyond $39.5 which Sun Phar­ma was unwilling to do. This is the reason why they decid­ed to ask the special commit­tee which was setup to look into this takeover to mutual­ly terminate the merger agreement. Each of Sun Pharma and Taro (at the di­rection of the special com­mittee) agreed that termi­nating the merger agreement was in the best in­terest of the respective com­panies and shareholders, says a company statement.

At present, the Taro shares are traded around $52 at NYSE, higher than Sun's current offer of $39.5. Sun Pharma ended the day at Rs 744.05, losing 0.63% from Thurdsay's close, on the BSE. A couple of investors had written to shareholders to reject Sun Pharma's offer.