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Sun plans to delist Caraco, offers share buyback

Press Trust of India  |  New Delhi 

Sun Pharma today said it plans to delist its Detroit-based subsidiary Caraco Pharma from the US bourses by acquiring all the shares of it.

In a letter written to the board of directors of Caraco, Sun Pharma Chairman Dilip Shanghvi said, "We are writing to propose a going-private transaction by which Sun, Sun Global and one or more their affiliates would acquire all of the outstanding shares of Caraco Pharmaceutical Laboratories..."

At present, Sun holds 76 per cent stake in Caraco.

The company said it will acquire the shares of Caraco at a price of USD 4.75 in cash per share, which is a five per cent premium over the most recent closing price of Caraco's shares.

"Our proposal presents valuable opportunities for our to build upon our existing commercial partnership and to realise the significant incremental benefits that will accrue from a full combination of our businesses," it said.

Sun, however did not disclose the total sum that would be involved.

The company said its proposal is not subject to any financing condition, but is subject to the approval of Caraco board and such authorities as may be required and subject to completion of necessary compliances and formalities.

Shanghvi said Caraco's board of directors have authorised the independent committee to evaluate the delisting proposal.

"We and our team, including our legal advisers are ready to meet with the independent committee and its advisers any time to discuss this proposal and to answer any question the independent committee or its advisers may have," Shangvi said.

Caraco is currently in the process to resolve its issues with the US FDA after the regulator seized drugs and raw materials following repeated violations of manufacturing standards in 2009.

First Published: Sat, December 04 2010. 15:09 IST