Taro wants shareholders to nix Sun Pharma offer
Taro Pharmaceuticals has recommended its shareholders to reject the unsolicited tender offer of Sun Pharma.
By Nina Mehta, ET Bureau |
MUMBAI: Taro Pharmaceuticals has recommended its shareholders to reject the unsolicited tender offer of Sun Pharma. The Israeli company also said that the Tel Aviv court would, in all probability, declare the Sun bid as illegal before the expiry of the offer.
In a letter written on Monday, Taro chairman and founder Barrie Levitt told the shareholders: ���Sun���s offer of $7.75 per share is significantly below the price at which our shares are trading today, which is at a 52-week high, and even further below the price that Sun paid to get blocks of Taro shares in recent private transactions with investors.���
He also said: ���Given our performance year to date and our outlook, I believe the Sun offer significantly undervalues our company and deprives investors of what we believe their shares are worth.���
Taro posted a better performance in the first half of this year. The company���s net income after tax for the first half of 2008 stood at $20.6 million, almost equal to the $21.1 million reported for the entire year of 2007.
The letter was sent to the shareholders nearly a month after Taro described the offer as ���a sham���. Franklin Templeton Asset Management, a major shareholder of Taro, had also rejected the Sun offer. Mark Mobius, chairman of the fund, had said the true value of the Taro stock could be as high as $20.
Sun Pharma���s consolidated net profit for the first quarter more than doubled to Rs 501.5 crore from Rs 227.2 crore in the year-ago period, the company said in a filing with the Bombay Stock Exchange on Monday. Total income rose to Rs 1,088.9 crore, as against Rs 688 crore.
According to Mr Levitt, by the time Sun���s tender offer expires on September 2, ���the court in Tel Aviv has indicated that it will rule on Taro���s claim that Sun���s tender offer is illegal under Israeli law���. Taro has sent a copy of the letter to the US Securities and Exchange Commission. It is also available on the company���s website.
In a letter written on Monday, Taro chairman and founder Barrie Levitt told the shareholders: ���Sun���s offer of $7.75 per share is significantly below the price at which our shares are trading today, which is at a 52-week high, and even further below the price that Sun paid to get blocks of Taro shares in recent private transactions with investors.���
He also said: ���Given our performance year to date and our outlook, I believe the Sun offer significantly undervalues our company and deprives investors of what we believe their shares are worth.���
Taro posted a better performance in the first half of this year. The company���s net income after tax for the first half of 2008 stood at $20.6 million, almost equal to the $21.1 million reported for the entire year of 2007.
The letter was sent to the shareholders nearly a month after Taro described the offer as ���a sham���. Franklin Templeton Asset Management, a major shareholder of Taro, had also rejected the Sun offer. Mark Mobius, chairman of the fund, had said the true value of the Taro stock could be as high as $20.
Sun Pharma���s consolidated net profit for the first quarter more than doubled to Rs 501.5 crore from Rs 227.2 crore in the year-ago period, the company said in a filing with the Bombay Stock Exchange on Monday. Total income rose to Rs 1,088.9 crore, as against Rs 688 crore.
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According to Mr Levitt, by the time Sun���s tender offer expires on September 2, ���the court in Tel Aviv has indicated that it will rule on Taro���s claim that Sun���s tender offer is illegal under Israeli law���. Taro has sent a copy of the letter to the US Securities and Exchange Commission. It is also available on the company���s website.
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