Sun Pharma Proposes Acquisition Of Remaining Stake In Taro Pharmaceutical Industries At $38 Per Share

Sun Pharmaceutical Industries has submitted a proposal to acquire the remaining stake in Taro Pharmaceutical Industries in which it is not already a majority stakeholder for $38 per share, according to a press release issued on May 27.

Sun Pharma presently holds 78.48 percent of Taro.

Taro has formed a special committee to assess the offer, and its shares rose 25% in after-hours trading on May 26.

The announced offer of $38 per share presents a substantial premium, with a 32% increase over Taro's closing price on May 25 and an even higher premium of 41.5% over the average closing price of the ordinary shares over the past 60 trading days.
The plan is for an all-cash transaction to buy all outstanding Taro stock, resulting in Sun Pharma owning 100 percent of the company after the transaction.
Sun Pharma stated in a stock exchange filing, "We envisage the Proposed Transaction to be consummated in the form of a reverse triangular merger under the Israeli Companies Law, 1999 ("ICL") and practise." In this context, Purchaser will construct a fully owned subsidiary (the "SPV") that will engage into a merger agreement with Taro, with the SPV merging with and into Taro and Taro surviving the merger transaction. As a result, Taro will become a wholly owned subsidiary of Purchaser and will be de-listed from the NYSE.
It add, "As this is a common practice in Israel, we believe that such transaction structure would benefit all stakeholders of Taro and may be performed in a swift and certain manner."
The completion of the transaction is contingent upon fulfilling several conditions, which include the final approval of transaction terms by Sun Pharma's management and Board of Directors, the execution and delivery of binding contractual documentation satisfactory to all parties involved, approval from all relevant governing bodies, including the shareholders of Taro as per Section 270(4) and 275 of the ICL, obtaining any necessary third-party approvals, and obtaining the required regulatory approvals, including from applicable Anti-Trust Authorities, if deemed necessary.