Sun Pharmaceutical Industries and Israel-based Taro Pharmaceutical have started fresh rounds of negotiations to settle their differences over a takeover by the Indian company out of court.
Sun Pharma Chairman and Managing Director Dilip Shanghvi and Taro Chairman Barrie Levitt met in Israel last Thursday to discuss a compromise, an Israeli newspaper reported yesterday.
A Sun Pharma spokesperson declined to comment on the meeting, but confirmed that mediation was on to resolve the differences.
Shanghvi and Levitt, who traded charges until last month on terms and conditions of the takeover, met in the offices of advocate Ram Caspi, who is mediating the compromise. A senior representative of Franklin Templeton, which holds 13.1 per cent in Taro, was also present at the meeting, reports said.
“In view of the ongoing litigation, it is difficult to predict when we can close the deal. There is an injunction against closing the tender offer,” said the company spokesperson.
Independent sources said lawyers of both parties were also discussing a resolution of the dispute.
The spokesperson also said the mediation was related to the revised price that Levitt suggested. In earlier rounds of discussions based on an Israel Supreme Court directive to attempt a settlement, Taro had demanded $15 per share, in cash, for the merger. Sun’s tender offer was at $7.75 per share to acquire all outstanding shares of Taro, including the founders’ shares, later revised to $9.50 per share with two options.
Sun Pharma rejected Taro’s offer, saying it was more than the value of the firm, which did not disclose audited results for three years and restated accounts. As a result, the discussions failed and both parties asked the court for a verdict. The court, however, directed them to renegotiate through a mediator.
Jan 30: Israel’s SC directs Sun, Taro to renegotiate
Jan 8: Taro demands $15/share for merger with Sun