It's too late to stop now, according the Sun Pharmaceuticals. Yesterday, Taro Pharmaceuticals said it was backing out of a planned merger with Sun because the move was not in the best interest of its shareholders. Taro seems to have a problem with the $10.25 per share offer Sun made for the company.
But Sun has no intention of letting Taro go quietly. The company said that stipulations in the merger agreement prevent Taro from pulling out of the deal. In a letter to Taro's board, Sun's Chairman Dilip Shanghvi didn't mince any words, saying that the company is skeptical of the turn-around that led to Taro's decision to call off the merger. "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."
Sun says it will now consider all of its options, including without limitation commencing legal proceedings as to Taro's right to terminate the merger.
- see Sun's release
- here's Shanghvi letter to Taro's board (.pdf)
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