Sun Pharmaceuticals has sent letters to the Taro management as a follow-up to the proposal that it had sent on 22 December, in compliance with the Israeli Supreme Court’s suggestion for the two companies to come to a mutual settlement regarding Sun’s takeover of Taro.
The letter had outlined two options. The first option suggested increasing the tender offer price of Taro’s shares to $9.50 once Taro withdrew termination of the agreement.
Sun would also end the tender offer. The second option was regarding increasing the offer price to $9 per share while the tender offer will remain open. The offer price according to the initial agreement between the two companies was $7.75.
However, Taro’s board has rejected both the options under the letter and has asked for shareholder referendum to end the impasse. Given the developments that have taken place in last one year, we believe the impasse is far from over. However, we maintain a BUY on the stock.