Sun Pharmaceutical proposes revised offer for Taro Pharmaceutical acquisition

In a notable development within the pharmaceutical industry, Sun Pharmaceutical Industries Limited has expressed a non-binding interest in acquiring shares of Taro Pharmaceutical Industries Ltd. Following Regulation 30 with Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Sun Pharmaceutical has updated its ongoing efforts to acquire Taro Pharmaceutical.

Initial Proposal and Negotiation Progress

Sun Pharmaceutical, on May 26, 2023, submitted a letter to the Board of Directors of Taro Pharmaceutical, indicating a proposal to purchase all outstanding ordinary shares of Taro, excluding those already held by Sun Pharmaceutical or its affiliates, at a price of $38 per share. This initial proposal marked the beginning of a series of price negotiations between Sun Pharmaceutical and a special committee of Taro’s Board of Directors (the “Special Committee”).

Revised Proposal and Agreement in Principle

The negotiations have led to Sun Pharmaceutical revising its offer, proposing $43 per share for the acquisition. On December 10, 2023, the Special Committee confirmed its agreement in principle with this Revised Proposal and consented to negotiate definitive agreements. These ongoing negotiations aim to finalize the terms and agreements for the Revised Proposal.

Definitive Agreement and Conditions

As the negotiations progress, there are no assurances that a definitive agreement will be reached. The Revised Proposal’s consummation is contingent on several factors, including further required corporate approvals, negotiation and execution of definitive documentation, and satisfaction of other customary conditions. The Special Committee, composed solely of independent directors, plays a critical role in this process. The transaction’s approval will also require the affirmative vote of Taro shareholders, excluding Sun Pharmaceutical, its affiliates, and any shareholders with a personal interest in the transaction.

In summary, Sun Pharmaceutical Industries Limited’s efforts to acquire Taro Pharmaceutical Industries Ltd represent a significant event in the pharmaceutical sector. The ongoing negotiations and the potential acquisition highlight the dynamic nature of the industry and the strategic moves companies are making to strengthen their market positions.