Israel's SC directs Sun, Taro to renegotiate

The Israel Supreme Court has directed Sun Pharmaceutical Industries and Taro Pharmaceutical to renegotiate the takeover dispute between the two companies.

Sun Pharma today said both camps, including the Taro promoter Barrie Levitt and Moros families, agreed to a mediation process to resolve the dispute, based on the recommendation of the Supreme Court three days ago. If no agreement is reached, any of the parties can request the Supreme Court to issue a judgment on the dispute.

"We are not in a position to reveal further details of the negotiations and the mediation," said a Sun Pharma spokesperson.

Earlier, the Supreme Court had allowed both camps time till January 7 for an out of court settlement. Sun and Taro informed the Supreme Court that those negotiations were unsuccessful. Taro had demanded a 58 per cent premium, or $15 per share, in cash to effect a merger with Sun Pharma during the negotiation rounds. Sun Pharma rejected the offer citing it was beyond the worth of Taro.

Sun Pharma also said it has extended its tender offer till March 6. The offer to acquire the remaining 64 per cent outstanding shares of Taro, was set to expire on January 30. The court had directed Sun not to close the tender offer till the court settles the matter.

In May last year, Taro terminated the $454-million merger deal with Sun Pharma. Sun challenged it in the US and Israeli courts and triggered an open offer to acquire Taro's outstanding shares. Taro and some of its directors appealed in the Supreme Court against the applicability of the special tender offer rules under the Israeli Companies Law to the Offer. This was after a Tel-Aviv District Court ruled in favour of Sun that a special tender offer was not required.

Also read: Taro demands $15/share for merger with Sun