The agreement comes after years of battling by Sun Pharma to take over Taro, dating back to May 2007, when Taro was a struggling company and Sun Pharma first bought shares in the company [1]. Sun Pharma only gained a controlling stake in Taro of about 66% in September 2010 after intervention by the Israeli Supreme Court, but was blocked from a complete takeover by Taro’s shareholders [2].

The two generics companies have agreed that all shareholders of Taro other than Sun Pharma and its affiliates will receive US$39.50 per share for Sun Pharma to buy the remaining 34% of Taro’s shares. Taro will then become a privately held company and be de-listed from the New York Stock Exchange.

The US$39.50 per share deal represents a significant increase of almost 60% in the value of the Taro shares compared to the offer Sun Pharma made back in October 2011 of US$24.50 per share.

Although Taro’s board has approved the latest proposal, Sun Pharma still needs shareholder approval, which has proved problematic in the past and may be exacerbated by the fact that Taro shares are currently trading at about US$40.97.

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References

1.  GaBI Online - Generics and Biosimilars Initiative. Sun Pharma finally wins battle for Taro [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Aug 24]. Available from: www.gabionline.net/Pharma-News/Sun-Pharma-finally-wins-battle-for-Taro

2.  GaBI Online - Generics and Biosimilars Initiative. Sun Pharma offers to buy remaining Taro shares [www.gabionline.net]. Mol, Belgium: Pro Pharma Communications International; [cited 2012 Aug 24]. Available from: www.gabionline.net/Pharma-News/Sun-Pharma-offers-to-buy-remaining-Taro-shares