New Delhi: Ahead of its upcoming annual general meeting on
December 31, 2009, Israeli drug firm Taro Pharmaceutical on Friday
asked its shareholders to reject a takeover bid by Indias Sun
Taro, which has been warding off a takeover bid by the Indian firm
ever since their proposed $454 million merger deal was called off
in 2008, warned the shareholders that if Sun was successful in its
bid, then the Israeli firm may be facing the same fate as that of
Caraco Pharmaceutical Labs.
Sun has been bad for Caraco and Sun could be disaster for your
investment in Taro, Taro Pharmaceutical CMD Barrie Levitt said in
a letter to shareholders.
Sun had acquired a majority stake in Caraco in 2004. In June this
year US regulators had banned Caraco from selling drugs made at
its three US plants after seizing 33 drugs and raw materials
citing deviation from manufacturing standards.
You should be aware of the serious corporate governance and legal
controversies facing Sun as a result of its stewardship of Caraco,
a US-based company in which Sun controls a majority of the shares.
We believe that Suns conduct at Caraco raises serious questions
about what may happen to minority shareholders of Taro if Sun is
able to gain control of your company (Taro), the letter added.
Levitt, in his letter, further said In the last eighteen months,
Caracos stock price has declined over 65%, from $17.2 as of May
30, 2008 to $ 5.9 as of December 10, 2009, and lawsuits by unhappy
Caraco shareholders ensued.
Currently, Sun and Taro are locked in a legal battle both in
Israel and the US over the unilateral termination of their
proposed merger deal signed in 2007 by Taro. Earlier this week,
Taro had written another letter to its shareholders alleging that
Sun Pharma is attempting to seize control by waging a proxy war.
Levitt said Sun has been trying to increase its stake in Taro by
attempting to exercise warrants. PTI