Sun Pharmaceuticals has agreed to purchase all remaining shares in Taro Pharmaceutical, completing its acquisition of the company.
Sun's interest in Taro began in 2007, and the company already owns 66% of ordinary shares and 100% of founders shares, representing 77.5% of Taro's voting rights. Sun will now pay $39.50 in cash per share in order to gain complete control, valuing Taro at approximately $1.75bn.
The buyout of the remaining shares will cost Sun around $580m after a special committee of Taro's board rejected a previous offer of $24.50 per share. The merger agreement was eventually approved by Taro's board of directors based upon the recommendations and approval of the special committee and an audit committee of Taro's board of directors.
Upon completion of the merger, Taro will become a privately held company owned by Sun Pharma affiliates, and all ordinary shares will be delisted from the New York Stock Exchange.
Sun's announcement comes just a day after minority shareholder Grand Slam Management rejected the offer and advised other minority shareholders to follow suit. Grand Slam Management reacted strongly to Sun's renewed offer, informing shareholders in a letter: "We believe this offer to be wholly inadequate and intend to vote our share against this transaction."
Taro reported profits of $63m on sales of around $159m in the most recent quarter. Although founded in Israel, most of its business is conducted in the US, providing Sun with a potentially lucrative entrance into the US market.