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Taro moves on Irish unit sale despite Sun opposition

Taro moves on Irish unit sale despite Sun opposition

Mumbai: Israeli drug maker Taro Pharmaceutical Industries Ltd, which last May ended a merger deal it had signed with India’s Sun Pharmaceutical Industries Ltd, has invited offers from global suitors that include the Mumbai drug maker for its Irish unit, Taro Pharmaceuticals Ireland Ltd.

At the same time, Taro has moved court in Israel to prevent Sun Pharma from blocking the sell-off plan. The Indian firm said earlier this month that it will protest Taro’s plan to sell the Irish business that includes a multi-purpose manufacturing and research facility, besides an active local market presence, which a Sun Pharma spokesperson described as “strategic." “...We will face the court case using all options," the spokesperson said, declining to be named.

The revenues at the Irish unit could not be immediately ascertained. Mint had reported in May that Sun Pharma may make an open offer to buy out existing shareholders in Taro.

On Thursday, Taro chairman Barrie Levitt asked shareholders not take any action in the event of such an offer “but instead await receipt of important information from the company concerning the board’s evaluation of any such offer." The Indian drug maker owns 34.4% in Taro after it bought small stakes in the Israeli firm since it first offered to buy it fully for $454 million (Rs19.5 billion).

A group of Irish investors has shown interest in Taro’s assets in Ireland for an undisclosed sum but Sun, headed by Dilip Shanghvi, had said it undervalues that unit. The facility has the potential to turn in substantial revenues for Taro in the future and any sale now is premature, Sun said.

The Israeli company had called off the 2007 merger with Sun Pharma saying the valuation of $7.75 for each Taro share was inadequate.

The acquisition of Taro would have given Sun Pharma a multinational generic manufacturer with established subsidiaries, manufacturing and products across the US, Israel and Canada, the Indian company has said.

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