Sun Pharma challenges Israel’s Taro in US court

June 26th, 2008 - 8:23 pm ICT by IANS  

Mumbai, June 26 (IANS) The city-based Sun Pharmaceutical Industries Wednesday filed a lawsuit against Israel’s Taro Pharmaceutical Industries in the New York Supreme Court for the control of the latter’s shares, the company announced here Thursday. Sun also announced that its subsidiary has acquired all shares held by the controlling shareholders of Taro Pharma under an option agreement signed between the two companies.

In a statement, Sun Pharma chairman and managing director Dilip Shanghvi said subsidiaries of Taro Pharma and Sun entered into a merger agreement May 18, 2007. The Taro Pharma board of directors accorded its unanimous approval to this.

At that time, Sun also agreed to invest nearly $60 million in cash to rescue Taro Pharma from bankruptcy.

However, later Taro Pharma’s controlling shareholders, led by its chairman Barrie Levitt, granted Sun an option to acquire all their shares, including all of the founders’ stake in Taro.

Taro Pharma then purported to terminate the merger agreement May 28 this year, an action termed as “improper” by Sun.

Shanghvi explained that the company’s decision to accept Levitt’s proposal was aimed at protecting its interests. He asserted that the company has not recognised the termination of the merger agreement.

He added that Sun will soon initiate a tender offer for all ordinary shares as required by the option agreement. The agreement also requires Sun specifically commence its tender offer at $7.75 per share.

Sun added that Taro Pharma and the non-Levitt family directors, who have not signed the option agreement, filed a case in the Tel Aviv District Court in a bid to delay and block the implementation of the option agreement.

“We have had enough of the delays, excuses and misrepresentations by the board of Taro Pharma and Levitt. We will do everything required to preserve our rights,” Shanghvi said.

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