Israeli drug firm Taro Pharmaceutical Industries today asked Sun Pharma to pay USD 15 per share for merger, while rejecting the USD-9.5 per share offer proposed by the Mumbai-based firm.
Israeli drug firm Taro Pharmaceutical Industries today asked Sun Pharma to pay USD 15 per share for merger, while rejecting the USD-9.5 per share offer proposed by the Mumbai-based firm.
"In an effort to respond to your request for a counter-proposal to your USD 9.5 per share offer, our board has authorised me to propose a merger price of USD 15 per share in cash," Taro Chairman Barrie Levitt said in a letter to Sun Pharma Managing Director Dilip Shanghvi.
Shanghvi has already sent two letters to Taro shareholders and its audit committee chairman, in which Sun has proposed to increase the offer price to USD 9.5 per share, from USD 7.75 per share it had offered earlier.
"As you know, we believe your proposal woefully undervalues Taro. Moreover, it is frankly hard for our board to consider the price to be a realistic one, in the light of the USD 10.25 per share that you paid to Brandes for its minority interest, last year," the letter said.
Levitt has written in response to Sun Pharma's rejection to Taro's offer of conducting referendum over the issue of merger agreement and the open offer launched by the Mumbai-based Pharmaceutical firm.
It has also expressed desire to conduct meeting with the representatives of Sun Pharma to resolve the deadlock. Meanwhile yesterday, Sun Pharma accused the board of Taro Pharmaceutical Industries of trying to 'sidestep' real issues, by calling for referendum.
"It is very obvious that by suggesting a referendum, the Taro board is helping the Levitt/Moros families (the current promoters of Taro) to sidestep the Option Agreement," the Sun Pharma spokesperson said.
However, Taro has also turned down the two proposals given by Sun Pharma and has come up with the proposal of referendum over the issue of merger agreement.
In May 2008, Taro had unilaterally terminated the USO 454-million merger agreement signed between Taro and Sun Pharma in 2007, citing undervaluations of its shares.
Thereafter, both companies filed suits against each other in Israel and New York. Pursuant to the litigation, Sun Pharma also launched an open offer at USD 7.75 per share to acquire additional stake in the company, which was again challenged in the Israeli Supreme Court.
The Israeli court suggested that both parties try to solve the issues through negotiations, while barring Sun from closing the open offer.
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