Taro to vote on merger with Sun in Q1
Taro Pharmaceutical Industries’ crucial shareholder meeting to vote on the proposed merger with India’s Sun Pharma will be held in the first quarter of 2008, the Israeli company said on Friday. Sun Pharma did not offer any comments immediately.
Last August, Taro had said that it expected to hold the meeting in October or in the beginning of November. The shareholder meeting that was initially scheduled in July has already been postponed twice, as the Israeli company’s audited results for 2006 was not available.
Sun, which already holds a 25% stake in the Israeli company, has been struggling over the last few months to gain control over Taro.
Sun had agreed last May to buy Taro Pharma for about $454 million, or $7.75 per ordinary share, to increase its foothold in the US generic market, which accounts for the largest share of Taro’s revenues.
However, the deal had hit a roadblock as a section of Taro’s shareholders insisted that the price offered by Sun was too low.
In July, Sun released Taro from its non-solicitation agreement, allowing the Israeli company and its investors to weigh other offers. Meanwhile, Taro Pharma also provided on Friday financial information on its operations, after a delay of several quarters.
Taro currently estimates its revenue for 2006 to be approximately $184 million, with a net loss for the year of approximately $140.7 million. As of September 30, 2007, Taro’s total debt was approximately $224 million.
These financial results are below expectations. In a proxy statement published in June, Taro had estimated net sales in the range of $180 million to $200 million for 2006 and a net loss in the range of $95 million to $120 million.
The firm attributed the higher than previously estimated loss to a higher level of asset impairments and efforts to cut inventory levels.
However, Taro estimated its revenue at $232 million and net income at approximately $14 million for the nine months ended September 30, 2007. The firm insisted that the financial data released was unaudited and that “these results do not provide complete financial information.”
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