Taro sues Sun Pharma again; alleges plan to block sale of Irish arm

20 June 2008

Israel's Taro Pharmaceuticals has sued its suitor Sun Pharmaceutical Industries in an Israel court, allegedly for thwarting attempts to sell off its subsidiary in Ireland.

On June 15, Taro started litigation in Israel to stop Sun from engaging in "practices that we deemed detrimental to our ability to maximise the value of the Irish operations in a sale," Taro chairman Barrie Levitt said in a letter to shareholders.

Taro's subsidiary in Roscrea, Ireland manufactures injectables and owns a multi-purpose pharmaceutical manufacturing and research facility, which it acquired a few years ago.

Taro backtracked from an over-an-year-old merger deal with Sun Pharma citing the company's dramatic turnaround within a year of the agreement. Sun Pharma, Taro's largest shareholder, with 34.4 per cent stake, had threatened to sue the Israel drug company for scuttling a $460 million deal.

Taro has offered Sun to consider an offer to purchase the Irish operations if it wishes to do so. "We will give any proposal submitted by Sun the same serious consideration that all bona fide offers receive," said Barrie Levitt.

Sun Pharma said its opposition to Taro's move stemmed mainly from concerns regarding the sale process and the gross undervaluation of its assets.