Taro selling Irish assets to thwart merger: Sun Pharma

06 June 2008

Israel's Taro Pharmaceutical Industries has put its strategic Irish facility on the block, in a bid to fend off a merger with Sun Pharmaceuticals. Taro said it is selling the multipurpose pharmaceutical manufacturing and research facility in Roscrea, Ireland, to a group of Irish investors.

Taro, which had announced termination of the merger agreement with Sun after more than a year, stating the price of $10.25 per share was "insignificant," expects the asset sale to make a merger of Taro unappealing to Sun Pharmaceuticals.

This forced Sun Pharma's chairman and managing director Dilip Shangvi to shoot off a missive to Taro chairman and managing director accusing Taro of using all means to shake off Sun's plans to acquire Taro.

"Sun is determined to take actions if Taro pursues this sale that would strip Taro of assets that Sun would otherwise have had the opportunity to preserve and subsequently develop had the merger agreement not been wrongfully terminated," Shangvi warned in a letter addressed to Barrie Levitt, chairman and managing director of Taro.

Sun also questioned the valuation of the company as also the choice of the Irish buyer and the close relations of Taro's management with the proposed buyer.

Taro Ireland has been valued less than its real estate worth in the proposed sale agreement with the Irish buyers, the letter points out.