Mumbai: Barrie Levitt, the chairman of Israeli drug maker Taro Pharmaceuticals Industries Ltd, has warned shareholders that it would be bad for the company if Indian drug maker Sun Pharmaceuticals Industries Ltd is allowed to take control of the firm.
The move comes less than a week after Levitt sought the support of Taro shareholders in the two-and-a-half year takeover battle.
Takeover battle: A Sun Pharma lab in Mumbai. Israeli drug maker Taro has been warding off a takeover bid by the Indian company. Abhijeet Bhatlekar / Mint
Levitt warns in his letter to shareholders on Friday that if Sun Pharma is successful in its bid, the Israeli firm could face a fate similar to that of Caraco Pharmaceutical Laboratories Ltd, Sun Pharma’s US subsidiary that had to discontinue manufacturing after a 2008 raid by the US Food and Drug Administration.
“Sun has been bad for Caraco and it could be disaster for your investment in Taro,” Levitt said in the letter, which is posted on the company’s website. Taro has been warding off a takeover bid by Sun Pharma since its management called off their proposed $454 million (around Rs2,111 crore) merger deal in 2008.
Earlier this month, Taro’s key investor and 10% shareholder, Templeton Asset Management Co., which had been supporting Taro until recently, threw its weight behind Sun Pharma.
In response to Levitt’s letter, a Sun Pharma spokesperson said it was a strategy to divert the attention of Taro shareholders from a controversial resolution that the Taro board was proposing to save the company and its directors for not having disclosed audited financial statements for several years.