Sun Pharma finally succeeds in Taro takeover with increased offer

Indian drugmaker Sun Pharmaceutical Industries (SUN: BO) says that it has now reached agreement to acquire Israel-based Taro Pharmaceutical Industries (PinkSheets: TAROF), after the former increased its offer price.

The merger agreement provides that all shareholders of Taro other than Sun Pharma and its affiliates will receive a cash payment of $39.50 per share on the closing of the transaction. Sun Pharma and its affiliates collectively own about 66.0% of the outstanding Taro ordinary shares and 100% of Taro’s founders shares, representing around 77.5% of the outstanding voting power in Taro.

Under the latest offer, Sun Pharmaceutical will pay $571 million to buy about a third of Taro's 44.5 million shares at $39.50 a share, up from the $24.50/share announcded last year (The Pharma Letter October 20, 2011) that Taro had previously rejected. Upon completion of the merger, Taro will become a privately held company, will be wholly owned by affiliates of Sun Pharma, and its ordinary shares will no longer be traded on the New York Stock Exchange.