Sun extends open offer for Taro to Sept 2
Sun Pharmaceuticals has extended the last date for buying the outstanding shares of Taro Pharmaceutical to September 2, from the earlier deadline of July 28.
By ET Bureau |
MUMBAI: Sun Pharmaceuticals has extended the last date for buying the outstanding shares of Taro Pharmaceutical to September 2, from the earlier deadline of July 28, on the recommendations of the Tel-Aviv District Court.
In a statement issued on Tuesday, Sun Pharma said the date of the offer was extended to allow the court to "rule on the merits of the litigation commenced against our subsidiary Alkaloida and its affiliates, by Taro and its directors, regarding the applicability of the special tender offer rules under the Israeli Companies Law."
The extended offer will now expire on September 2 at 5 pm New York time. As of July 11, Sun has managed to get only 700 ordinary shares. Shares of Sun Pharma fell 2.06% on Tuesday to close at Rs 1,309.65 on the BSE, compared to the previous day close of Rs 1,337.20. Sun commenced its hostile bid on June 30, after Taro terminated the merger agreement between the two companies in May 2008. Sun is offering $7.75 for every Taro share, a price which Taro���s board claims "undervalues its shares.
On Monday, Franklin Templeton, one of the Taro���s shareholder, rejected Sun Pharma���s offer. "The ferocity of the opposition has surprised me. But I don���t know by extending the offer, Sun will get the numbers that they are looking at," said PriceWaterhouseCoopers associate director Sujay Shetty. "If they don���t, they will continue to be a minority and I am not sure if that fits in with their long term objective since they are looking at getting into the US market where Taro is strong," he added.
The market also expects little success to the offer. "With the open offer priced at $7.75, but Taro shares trading at $9.45, it seems difficult that the offer will go through at the current price," said Alok Dalal, a research analyst with Religare Research. "Even the equity right that Sun claims it has, is being contested by Taro, so there is uncertainty on that front as well."
Sun Pharma has claimed that the merger agreement provides it the right to acquire all shares held by the Taro founders for free in case the deal does not materialise. Due to differential voting rights attached to the shares, Sun can get voting rights of 8% and 33%, respectively, if it���s offer is fully subscribed.
In a statement issued on Tuesday, Sun Pharma said the date of the offer was extended to allow the court to "rule on the merits of the litigation commenced against our subsidiary Alkaloida and its affiliates, by Taro and its directors, regarding the applicability of the special tender offer rules under the Israeli Companies Law."
The extended offer will now expire on September 2 at 5 pm New York time. As of July 11, Sun has managed to get only 700 ordinary shares. Shares of Sun Pharma fell 2.06% on Tuesday to close at Rs 1,309.65 on the BSE, compared to the previous day close of Rs 1,337.20. Sun commenced its hostile bid on June 30, after Taro terminated the merger agreement between the two companies in May 2008. Sun is offering $7.75 for every Taro share, a price which Taro���s board claims "undervalues its shares.
On Monday, Franklin Templeton, one of the Taro���s shareholder, rejected Sun Pharma���s offer. "The ferocity of the opposition has surprised me. But I don���t know by extending the offer, Sun will get the numbers that they are looking at," said PriceWaterhouseCoopers associate director Sujay Shetty. "If they don���t, they will continue to be a minority and I am not sure if that fits in with their long term objective since they are looking at getting into the US market where Taro is strong," he added.
The market also expects little success to the offer. "With the open offer priced at $7.75, but Taro shares trading at $9.45, it seems difficult that the offer will go through at the current price," said Alok Dalal, a research analyst with Religare Research. "Even the equity right that Sun claims it has, is being contested by Taro, so there is uncertainty on that front as well."
Sun Pharma has claimed that the merger agreement provides it the right to acquire all shares held by the Taro founders for free in case the deal does not materialise. Due to differential voting rights attached to the shares, Sun can get voting rights of 8% and 33%, respectively, if it���s offer is fully subscribed.
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