Mumbai: It’s a case of a friendly acquisition turning messy and becoming entangled in a legal battle. Dilip Shanghvi, the soft-spoken chairman and managing director of Sun Pharmaceutical Industries Ltd, did not give up. As the court battle progressed, Mark Mobius, chairman of Templeton Asset Management Co. Ltd, having significant holdings in Taro Pharmaceutical Industries Ltd, rallied behind Shanghvi after initially leaning towards Barrie Levitt, promoter and chairman of Taro. After the Israeli court’s order in his favour, which clears the way for the Taro deal, the usually reticent Shanghvi agreed to an email interview. Edited excerpts:
Is the proposed merger imminent with the Israeli Supreme Court’s order?
Israeli Supreme Court verdict clears the path for us to acquire the Taro shares, currently owned by the Levitts. This will give us a controlling stake of 65% in Taro. There is no proposal for a merger at the moment.
Do you expect any more hurdles in exercising the option agreement as far as the transfer of controlling stake by the promoters of Taro?
The district court in Tel Aviv was extremely critical of the behaviour of Taro and its directors. The Supreme Court has reaffirmed the district court’s finding that Taro and its directors had acted in bad faith. We certainly hope that the independent directors now stop using Taro resources to support litigations that solely benefit the Levitts in their personal capacity, at the cost of the minority shareholders.
Will there be any more negotiations to revise the offer price from Taro’s side?
There is no negotiation. The current offer price of $7.75 (per share) is embedded in the option agreement which the Levitts signed and the board approved in 2007.
Is the Supreme Court order also appealable for Taro at any other judiciary or legislatory forums?
While a request for review by a larger bench of the Supreme Court is possible, as per the advice received by us, the current case does not appear to qualify as per the usual criteria applied to cases considered fit for such a review. In view of this, we hope that the independent directors of Taro don’t waste any further resources of the company.