Sun Pharma wins case against Taro
Our News Bureau – Mumbai
Sun Pharmaceutical won a case in Israel which was filed against by Taro regarding an open offer for the latter.
The Tel-Aviv Court has rejected Taro’s contention that Sun Pharma should have conducted a ‘special tender offer’ under Israeli Law. As a result, Sun Pharma will be in a position to complete the previously announced tender offer by its subsidiary, Alkaloida Chemical Company Exclusive Group. (Alkaloida). Following the closing of the tender offer, all conditions to Sun Pharma’s option agreement to acquire all the shares held by the controlling shareholders of Taro will be satisfied and the controlling shareholders will have to deliver their shares. In a well reasoned and comprehensive decision, Dr Michal Agmon-Gonen J of the Tel-Aviv District Court ruled that it was ‘disingenuous’ for Taro’s directors to claim now, over a year after they approved the transaction, that a special tender offer was required. The court stated that the directors should have studied the agreements prior to their being signed, and should have confirmed then that they were in the company’s best interest. The court stated that the directors cannot claim now that they suddenly decided a special tender offer is necessary.
Dilip Shanghvi, Chairman and Managing Director, Sun Pharma said, “It is clear based on yesterday’s ruling that the lawsuit by Taro’s independent directors was part of a calculated effort by Barry Levitt to avoid living up to his obligations under the option agreement. It is time for Dr Levitt and his family to live up to the contract and do what is required of them under the Option Agreement.”
With respect to those directors who are also shareholders, the court stated that, “These shareholders benefited from Sun’s investment, which basically saved Taro from collapse, and characterised their conduct in challenging Sun Pharma’s exercise of its contractual option as grave.”
The court also ordered Taro and the other plaintiffs to pay Sun Pharma’s costs related to the litigation.
(Extracted from Express Pharma, 16-30 September 2008)