Sun Pharma has offered to acquire the shares beyond its 78.48 percent stake in Taro Pharmaceutical Industries for $38 per unit, it has said in a press release. Taro, which saw its shares trade up 25 percent in after-hour trading on May 26, has formed a special committee to evaluate the offer.
According to the release, the $38 per share offer represents a 32 percent premium over Taro's closing price on May 25 and a 41.5 percent premium over the average closing price of the ordinary shares over the last 60 trading days.
The proposal is for an all-cash transaction to acquire all outstanding stock of Taro, such that following the transaction, Sun Pharma will own 100 percent of the stock.
A filing by Sun Pharma in the stock exchanges stated, "We envisage the Proposed Transaction to be consummated in the form of a reverse triangular merger under the Israeli Companies Law, 1999 ("ICL") and practice. In this context, Purchaser shall form a wholly owned subsidiary (the "SPV"), which shall enter into a merger agreement with Taro, with the SPV merging with and into Taro and Taro surviving the merger transaction. Consequently, Taro shall become a wholly owned subsidiary of Purchaser and be de-listed from NYSE."
It add, "As this is a common practice in Israel, we believe that such transaction structure would benefit all stakeholders of Taro and may be performed in a swift and certain manner."
The final approval of the transaction will be subject to various conditions, including final approval of transaction terms by Sun Pharma's management and Board of Directors; execution and delivery of binding contractual documentation to the satisfaction of all parties; approval of all the governing bodies, including the shareholders of Taro in accordance with Section 270(4) and 275 of the ICL; receipt of any third-party approvals, if needed; and receipt of applicable regulatory approvals, including from any relevant Anti-Trust Authorities to the extent required.