The merger between Israeli drug company Taro Pharmaceutical Industries Ltd. (NYSE: TARO)and Sun Pharmaceutical Industries Ltd. NSE: SUNPHARMA, BSE: 524715) of India is off, the companies announced on Friday. The announcement said that " they have mutually agreed to terminate their merger agreement, announced in August 2012, pursuant to which all shareholders of Taro (other than Sun Pharma and its affiliates) would have received a cash payment of $39.50 per share upon the closing of the merger. Each of Sun Pharma and Taro (at the direction of the Special Committee) agreed that terminating the merger agreement was in the best interest of the respective companies and shareholders." The deal was worth $685 million in total.
Sun Pharmaceutical Industries owns 61% of Taro. It now seems that its six-year attempt to buy the company outright has failed.
“As earnings keep coming in stronger and stronger for Taro, there was obviously a lot of disconnect with the price Sun was willing to offer,” Nitin Agarwal, an analyst at IDFC Securities Ltd. in Mumbai told Bloomberg.. “It was fairly unlikely that the deal would have gone through.”
“We concluded that Taro shareholders wouldn’t agree to the deal unless the offer price was increased substantially,” said Sun Managing Director Dilip Shanghvi
Taro shares closed 2.79% up in New York on Friday at $51.96, giving the company a market cap of $2.32 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on February 10, 2013
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