Taro rejects "sham" tender offer from Sun
Israel's Taro Pharmaceutical Industries has rejected a tender offer from Sun Pharmaceuticals. Taro's board of directors has unanimously concluded that Sun's offer is financially inadequate, accusing the Indian drug company of making a "sham" offer, one so low it knows it will not succeed, solely for the purpose of exercising option rights that were part of the companies abandoned merger agreement (Marketletter June 9).
This is the latest in a series of conflicts between the two firms since Taro pulled out of a May 2007 merger agreement last month, with the board saying that the offer price did not reflect the dramatic operational and financial turnaround that the company has achieved since then. Sun recently sent a letter to Taro's board, requesting transparency regarding its reasons for dropping out of a merger (Marketletter June 16).
Taro claims that Sun's supposedly sham offer is in violation of the Israeli Companies Law - 1999 and recommends that shareholders not tender any of their shares.
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