Sun Pharma's lowball bid for Taro opposed by Krensavage Asset Management
New York: As the largest minority shareholder of Taro Pharmaceutical Industries Ltd., Krensavage Asset Management LLC opposes Sun Pharmaceutical Industries Ltd.'s paltry bid to take Taro private.
Sun, a 78.5% Taro shareholder, on May 26 offered to acquire the rest of Taro for $38 a share, valuing the company at $1.4 billion.
Sun's inadequate offer amounts to a 17% discount to the value of Taro's tangible assets, namely $36 a share of net cash. If Taro liquidated, shareholders could receive more than $45 a share.
Taro boasts more than just cash and real estate. The maker of generic creams and ointments generated $2.4 billion of cash in the 10 years ended March 31.
Not only is Sun failing to offer a control premium, but it also seemingly ignores Taro's 22 generic drugs awaiting clearance in the U.S., including four with tentative approvals.
With a market value of $31 billion4, Sun can pay more. Sun is offering, net of Taro's cash, $16 million for the roughly 8.1 million Taro shares it doesn't own.
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