Krensavage Asset Management LLC on Wednesday (July 19) declined Sun Pharmaceutical Industries' paltry bid to take Taro Pharmaceutical Industries. Krensavage is the largest minority shareholder as it has 641,910 shares of Taro, as on March 31, 2023.
Sun Pharma, the majority shareholder of Taro, has a 78.5 percent stake in the company, on May 26 offered to acquire the remaining stake by putting the company’s valuation at $1.4 billion— $38 a share.
Krensevage claimed it to be an inadequate offer by Sun that amounts to a 17 percent discount, which would put the value of tangible assets at $38 per share of net cash. Taro’s liquidation could provide shareholders more than $45 a share.
Taro, a manufacturer of generic creams and ointments generated $2.4 billion in the last 10 years, which ended March 31. Other than Sun’s failure to offer a control premium, it is also seemingly ignoring clearance of Taro’s 22 generic drugs in the US of which four require tentative approvals.
Sun with a market valuation of $31 billion, is offering $16 million for around 8.1 million Taro shares Sun Pharma doesn't own. According to Krensavage, Taro is in agreement with the minority shareholder’s assessment.
In December 2018, Taro paid $91 per share to repurchase its stock in a tender offer, which is about two-and-a-half times Sun's current bid. Moreover, Krensevage adds that in October 2011, Sun lowballed Taro's shareholders with a bid of $24.50 a share.
10 months later, Sun raised its offer more than 60 percent to $39.50 after the bid was rejected by a special committee of Taro directors. Krensevage also added that Sun requires the approval of a majority of Taro’s minority stakeholders, who have refused to support the transaction as Taro did not acknowledge the value of Taro.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
2024 Lok Sabha Elections | Will Amethi and Rae Bareli see the rise of Priyanka Gandhi as a dominant political figure
May 18, 2024 8:59 AM
Lok Sabha Election 2024: I.N.D.I.A. bloc to hold rally at Mumbai's BKC today
May 17, 2024 5:18 PM
In Ayodhya, voters talk of a promise fulfilled and yearning for development
May 17, 2024 2:10 PM
Fight of heavyweights in Sambalpur where farmers, weavers hold the key
May 17, 2024 12:25 PM