New Delhi: Sun Pharmaceuticals Ltd said on 29 July its proposed takeover of Taro Pharmaceuticals could take longer due to the legal tussle, while giving a very low rating the ‘probability’ of an out-of-court settlement with the Israeli company.
“Going by the behaviour displayed by Taro Pharmaceuticals, its director and the Levitt family and its passion for filing court cases, it appears that ultimate resolution for all issues involved is likely to take quite a bit of time,” Sun Pharma chairman and managing director Dilip Shanghvi said.
“I wanted to caution every body that its not something that will get over very soon,” he added.
Shanghvi said several options exist before the company “to secure our long-term interests and we remain committed to the completion of this transaction”.
Asked if the company would look for other options to grow inorganically if the litigation with Taro took longer, he said: “We don’t have such a long timeline but we would continue to look for more opportunities.”
Stating that the chances of an out-of-court settlement with Taro were minimal, he said, “If there was a possibility of settlement from our point of view then I don’t think this would have gone into litigation.”
Shanghvi, however, said Sun was engaged in negotiations with Taro as per a requirement of the US court for some kind of settlement.
“But otherwise, I think the deposition of experts and discovery are continuing and hopefully, by sometime in the middle of next year, the litigation should start,” he said.
He reiterated that the negotiations with Taro were due to US laws, which generally prefer to have both the parties try to find a mediated settlement and that process is supervised by a judge.
“Any big differences, then the settlement does not work. There is a date which has to be finalised and which is convenient to all the people,” he said.
Shanghvi said Sun was confident of its legal position and would be able to enforce its rights under the option agreement to consummate the transaction.
Commenting on the tender offer, which Taro described as ‘sham’ he said :“It is with a view to preserve our rights under the option agreements which basically requires us to launch a tender offer at $7.75 per share, which is what we have done.”
Sun and Taro have been locked in a pitch battle after the Israeli firm unilaterally terminated their $454-million merger agreement signed in 2007.