Navigation Links
Raging Capital Calls On Taro Pharmaceutical Shareholders To Vote Against The Taro / Sun Pharma Merger
Date:9/19/2012

ROCKY HILL, N.J., Sept. 19, 2012 /PRNewswire/ -- Raging Capital Management, LLC ("Raging Capital"), one of the largest unaffiliated shareholders of Taro Pharmaceutical Industries Ltd. ("Taro") (NYSE: TARO), has issued an open letter to shareholders of Taro calling on shareholders to vote down the proposed "going private" merger between Taro and Sun Pharmaceutical Industries Ltd. ("Sun").  Raging Capital believes that Sun's offer to take Taro private at a price of $39.50 per share significantly undervalues Taro.  Accordingly, Raging Capital intends to vote against the proposed merger and encourages other minority shareholders of Taro to do the same. 

The full text of the letter follows:

Dear Fellow TARO Shareholders,

Raging Capital Management, LLC is one of the largest unaffiliated shareholders of Taro Pharmaceutical Industries Ltd. ("TARO" or the "Company").

We believe that Sun Pharmaceutical Industries Ltd.'s ("Sun") offer to acquire TARO for $39.50 per share in a "going private" merger (the "Merger") materially undervalues the Company.  As a result, WE INTEND TO VOTE AGAINST THE PROPOSED MERGER AND CALL UPON OUR FELLOW UNAFFILIATED SHAREHOLDERS TO DO THE SAME.  If you believe $39.50 is an acceptable price, you might as well sell your shares into the marketplace – where the stock trades at a significant premium to Sun's offer price.

We also call on TARO's Board of Directors and Special Committee to IMMEDIATELY WALK AWAY FROM THIS PROPOSED DEAL, AS IS THEIR RIGHT UNDER THE MERGER AGREEMENT.  We believe the Board has significantly undervalued the Company.  In our opinion, TARO is an extremely high-quality and unique asset with important scale and presence in the North American generic topical creams, ointments, and dermatological markets.  There are only a handful of companies with TARO's research, development, marketing, and distribution capabilities.  A transaction with Sun at $39.50 does not maximize value for all shareholders – it only maximizes value for Sun.

At $39.50 per share, we estimate TARO is being valued at just over 6x its run-rate EPS and less than 5x EBITDA after subtracting the Company's nearly $7.00 per share in net cash.  In our opinion, at this valuation an investor would be hard-pressed to find an equity security of TARO's quality and cheapness anywhere else on the planet.  In fact, we challenge Sun and TARO to demonstrate that $39.50 is a reasonable valuation especially when comparable assets have sold from anywhere between 8x to 12x EBITDA during the past nine months. 

The reality is that TARO is of significant actual and prospective value to Sun, a $12.8 billion market cap company in India.   TARO currently represents nearly 37% of Sun's EBITDA; valued at Sun's current market multiple, this would imply a value of $107 per share for TARO.  Strategically, TARO represents an irreplaceable component of Sun's plans to expand globally and into North America. 

The TARO proxy statement and Citigroup's "fairness opinion" that attempts to rationalize the merits of Sun's offer is insulting to shareholders.  A judge should throw the book at TARO and Sun for projecting 2012 EBITDA of just $267 million when TARO generated $145 million in EBITDA in the first two quarters of 2012 alone.  Based on year-to-date and Q2 results and considering current pricing and script volume data, we estimate full year EBITDA could be between $320 and $350 million, approximately 20% to 31% higher than TARO's and Sun's lowball estimate. 

Fortunately, Israeli law provides for significant minority shareholder protections, including a "majority of the minority" rule that allows minority shareholders to vote down this proposed Merger.  For these reasons, WE INTEND TO VOTE OUR SHARES AGAINST THIS PROPOSED MERGER AND CALL ON FELLOW UNAFFILIATED SHAREHOLDERS TO DO THE SAME.

Thank you in advance for your support.

Sincerely,

William C. Martin

Chairman & Chief Investment Officer
Raging Capital Management, LLC


'/>"/>
SOURCE Raging Capital Management, LLC
Copyright©2012 PR Newswire.
All rights reserved

Related medicine technology :

1. Maroon 5 Lead Singer Adam Levine and Shire Announce "The Own It Project," Encouraging Adults with Attention-Deficit/Hyperactivity Disorder to Tell Their Stories Through a National Contest
2. PLC Systems Secures Additional Financing For US Clinical Trials And General Working Capital
3. Genstar Capital Completes ERT Acquisition In A Take-Private Transaction
4. Savient Pharmaceuticals Receives Favorable Decision In Tang Capital Litigation
5. Intrepid Investment Bankers LLC Advises A-Med Health Care in the Sale of its Specialty Pharmacy Assets to Modern HC Pharmacy, Inc., a portfolio company of Altamont Capital Partners
6. Neuralstem Announces Exercise Of Entire Over-Allotment Option By Aegis Capital Corp.
7. Physicians Capital Investments, Physicians Capital Markets, and EDGE Realty Capital Markets announce a new strategic initiative
8. Savient Pharmaceuticals to Present at the 6th Annual Imperial Capital Global Opportunities Conference
9. Innophos To Present At 2012 KeyBanc Capital Markets Basic Materials & Packaging Conference
10. GP Strategies to Present at the BMO Capital Markets 12th Annual Back to School Education Conference
11. Medical Device Recalls Soar During First Quarter, ExpertRECALL Index Shows
Post Your Comments:
*Name:
*Comment:
*Email:
(Date:6/23/2016)... -- Research and Markets has announced the addition ... to their offering. The ... commercial environment for MedImmune to enter. The US ageing population ... to drive considerable growth for effective anti-influenza medications. The introduction ... considerably, but development is still in its infancy. ...
(Date:6/23/2016)... and INDIANAPOLIS , June 23, 2016 ... Lilly Diabetes Tomorrow,s Leaders Scholarship is any indication, the ... announced today online at www.diabetesscholars.org by the ... diabetes stand in the way of academic and community ... Foundation,s scholarship program since 2012, and continues to advocate ...
(Date:6/23/2016)... June 23, 2016  Guerbet announced today that it ... Supplier Horizon Award . One of 12 ... recognized for its support of Premier members through exceptional ... excellence, and commitment to lower costs. ... recognition of our outstanding customer service from Premier," says ...
Breaking Medicine Technology:
(Date:6/26/2016)... ... 26, 2016 , ... Brent Kasmer, a legally blind and certified personal trainer is helping to ... app. The fitness app plans to fix the two major problems leading the fitness industry ... fits all type program , They don’t eliminate all the reasons people quit ...
(Date:6/25/2016)... (PRWEB) , ... June 25, 2016 , ... The temporary closing of Bruton Memorial Library ... City Observer , brings up a new, often overlooked aspect of head lice: the parasite’s ... for fumigation is not a common occurrence, but a necessary one in the event that ...
(Date:6/25/2016)... ... June 25, 2016 , ... Dr. ... from injury. Recently, he has implemented orthobiologic procedures as a method for treating ... one of the first doctors to perform the treatment. Orthobiologics are substances that ...
(Date:6/24/2016)... , ... June 24, 2016 , ... Those who have ... these feelings, many turn to unhealthy avenues, such as drug or alcohol abuse, as ... Michigan, has released tools for healthy coping following a traumatic event. , Trauma sufferers ...
(Date:6/24/2016)... ... , ... Global law firm Greenberg Traurig, P.A. announced that 20 Florida attorneys ... peers for this recognition are considered among the top 2 percent of lawyers practicing ... members of this year’s Legal Elite Hall of Fame: Miami Shareholders Mark D. ...
Breaking Medicine News(10 mins):