DOW JONES NEWSWIRES
Taro Pharmaceutical Industries Ltd. (TAROF) is suing Sun
Pharmaceutical Industries Ltd. (524715.BY) due to a number of
allegations that Sun failed to disclose shareholder material
information in its pursuit to acquire Taro.
There has been a two-year standoff between Mumbai-based Sun and
Israel-based Taro since Sun originally struck a deal to buy its
ailing peer in 2007 at $7.75 a share. But an equity infusion from
Sun, as part of the agreement, boosted Taro. With its stock trading
above the offer, the company isn't as keen on the original
deal.
On Tuesday, Taro said Sun failed to disclose recent action by
the U.S. Food and Drug Administration against its majority-owned
U.S. subsidiary Caraco Pharmaceutical Laboratories Ltd. (CPD) in
which the FDA seized $20 million in products, effectively closing
down the U.S. unit's manufacturing operations. The FDA said it
found manufacturing defects at Caraco's plants, including oversized
tablets.
Taro alleges the FDA's action grew out of a "long pattern of
failure to comply with regulatory requirements." It cited the
impact of the events as harmful to Taro if Sun were to gain control
of the company.
Taro said Sun illegally used confidential information to disrupt
and harm Taro's customer relations and undermine Taro's
revenue.
Taro is seeking to prohibit use of Sun's "improper tender offer
materials" as well as seeking damages and injunctive relief.
The U.S. District Court filing in New York on Tuesday is in
addition to ongoing pending litigation involving Taro, Sun and
others in Israel and New York state courts.
Sun officials in India weren't immediately available to
comment.
Taro's shares were down 1.6% to $9 in after-hours trading.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com