Sun Pharma responds to Taro's purported termination of merger agreement
MUMBAI, India: May 29, 2008 - Sun Pharmaceutical Industries today sent a letter to Barrie Levitt, M.D., Chairman of Taro Pharmaceutical Industries regarding Taro's purported termination of the May 18, 2007 merger agreement with Sun.
Dilip Shanghvi, Chairman and Managing Director of Sun, said, "Taro is not entitled to terminate the merger as per our agreement .We remain skeptical of Taro's turnaround. Taro has only $47 million in cash as of March 31, 2008. This means that, if not for Sun's cash injections of approx $60 million last year, Taro would have virtually negative cash - hardly the "dramatic" improvement of which Taro has boasted. While Sun has made every effort to fulfill its obligations under the Merger Agreement, Taro has failed to honor its side of the bargain and take all necessary action to consummate the merger. Further, Taro has ignored our attempts to discuss, and put forward to Taro's shareholders, an increase in the merger consideration in order to complete the transaction."
While Mr. Shanghvi notes that in light of Taro's actions, Sun will now consider all of its options, he said "we continue to believe that a merger with Sun at $10.25 per share that we have offered to recommend to Sun's board is in the best interests of all Taro shareholders."
The full text of Sun Pharma's letter to Barrie Levitt, M.D., is attached.