Legal wrangles may complicate matters for Taro

Taro���s promoters and financial institutions, which together have 22% stake, rejected the merger agreement with Sun last month, terming the Indian firm���s revised $10.25 a share offer as inadequate given the improvement in Taro���s fortunes.

It had also filed a lawsuit in Israel on May 28 seeking to force Sun to make a revised offer. Sun refuses to do this.

On Thursday, Sun Pharma shares rose 3% to close at Rs 1,342.60 on the BSE. Taro was trading at $9.50 over-the-counter at the time the article was written.

���My sense is that the legal issues make it complex. While the litigation continues, it will be difficult for Sun to get the shares from Taro���s promoters.

I think Sun filed the action to abide by the agreement. It exercised its option to be on the right side of law. I don���t think it is going to be able to acquire the shares anytime soon,��� according to Edelweiss analyst Amod Karanjikar.

Taro filed an injunction in the Tel Aviv District Court seeking to overrule the options agreement on May 28. Sun must first make a separate offer under Israeli tender rules aimed at protecting minority shareholders, the statement said.