A US district court has dismissed a petition by Israel's Taro Pharmaceutical Industries to block leading Indian drug maker Sun Pharma from launching an open offer to acquire majority stake in the former.
A Sun statement said the US district court for the Southern District of New York had dismissed in its entirety the complaint filed by Taro seeking to block the tender offer by Sun's subsidiary, Alkaloida Chemical Company Exclusive Group Ltd, to purchase all outstanding ordinary shares of Taro.
"Sun is pleased, but not surprised, by this decision", said Dilip Shanghvi, chairman and managing director.
Sun Pharma, with over 35 per cent stake in the Tel Aviv-based Taro, is its single-largest shareholder. The company has been trying to acquire majority stake in Taro ever since a $454-million merger deal between the two firms got stuck in litigation. Taro promoters had unilaterally decided to abort the deal, alleging the company was undervalued at the time. Sun had claimed Taro was back on track only with their assistance. The Sun-Taro litigation is now pending with Israel's Supreme Court.
Taro's US litigation against Alkaloida Chemical was triggered by the latter's open offer in 2008 to acquire additional shares of Taro. "The court also dismissed Taro's other claims, like breach of contract and misappropriation of trade secrets, for lack of subject matter jurisdiction," the Sun statement said.
The Indian firm said the court had given two weeks to Taro for filing an amended complaint in an attempt to fix the defects in its earlier petition.
Sun said the amended complaint won't have any impact on the current verdict, as Taro is not entitled for an appeal against the Court's decision to dismiss the injunction plea. Sun said Alkaloida's offer remains subject to a continuing order issued by the Supreme Court of Israel, temporarily prohibiting the closing of the offer until the court issues a decision on the appeal of a separate litigation commenced against Alkaloida and its affiliates by Taro.
Sun's shares on the Bombay Stock Exchange closed at Rs 1,739.1, marginally lower than the previous day's close of Rs 1,743.7 a share.