Sun Pharma extends Taro tender offer

16 July 2008

Sun Pharmaceutical Industries Ltd has extended the tender offer for purchase of all outstanding ordinary shares of Israel's Taro Pharmaceutical Industries Ltd up to 5:00 pm New York time on 2 September, within days of Taro's board asking its shareholders to reject Sun's offer as it was ''financially inadequate''.

The offer had previously been scheduled to expire at midnight on Monday, 28 July.  Sun had commenced the tender offer through its Hungarian subsidiary, Alkaloida Chemical Company Exclusive Group Ltd, which has received 700 ordinary shares from Taro shareholders.

The company said that it had extended the date at the recommendation of Judge Dr Michal Agmon-Gonen J. of the Tel-Aviv District Court to enable the court to rule on the merits of the litigation that Taro and is affiliates had filed against Alkaloids on the applicability of the special tender offer rules under the Israeli Companies Law to the Offer.

In May 2007 Sun had enterd in to an all-cash $454-million to acquore the Israeli firm. (See: Sun Pharmaceutical to acquire Taro Pharma for $454 million) The acquisition included refinancing of $224 million of Taro''s net debt along with acquiring Taro''s equity for $230 million or $7.75 per share, a 27 per cent premium to its 18 May, 2007, closing price of $6.10.

In addition, to providing immediate liquidity for Taro, sun will provide interim financing to the extent of $45 million.

Sun, which already owns 36 per cent of Taro shares, decided to push through with a hostile offer to Taro shareholders, after the Israeli firm revoked its earlier agreement to be acquired by Sun and unilaterally terminated its $454-million merger agreement, entered a year ago, saying that since then, its finances had improved and that it preferred not to be acquired.(See: Israel's Taro to terminate merger with Sun Pharmaceutical)