A special committee set up by Taro Pharma board to review Sun Pharma‘s buyout offer has rejected the offer as inadequate, eight months after the offer was made, reports Archana Shukla of CNBC-TV18.
A special committee set up by Taro Pharma board to review Sun Pharma's buyout offer has rejected the offer as inadequate, eight months after the offer was made, reports Archana Shukla of CNBC-TV18.
Eight months after Sun Pharma made the first offer to take Taro Private to acquire 33% in Taro at USD 24.5 a share, a special committee appointed by the Taro board has rejected it. There had been opposition ever since Sun Pharma made this offer in October 2011.
Companies like IsZo Capital, Grand Slam Asset Management, Raging Capital who holds minority share have opposed the offer and said that this does not reflect the true value of Taro.
Taro has turned around and the share pieces have gone up for Taro since Sun Pharma acquired it after a three year legal battle with the promoters of Taro. In October 2011, when Sun made this offer, it valued Taro at over USD 1 billion and the price at USD 24.5 was 23.8% premium to the current share price of Taro.
But currently, Taro's share price opened at USD 37.5 per share, which is subsequently higher than the offer price that Sun has made, and this is pushing all the minority share holders to look for a higher bid. In March, Raging Capital had asked USD 48 a share as the offer price. It will be interesting to see how Dilip Sanghvi will take ahead this second leg of Taro acquisition.
They want to integrate Taro into Sun Pharma, and want to take Taro Private and integrate the company, but they certainly will have to loosen their purse strings further more than USD 24.5.