Sun Pharma calls off $600-million buyout of Taro

Indian pharmaceutical major Sun Pharmaceutical Industries Ltd has agreed to terminate a Rs3,100-crore ($600 million) buy-out of all outstanding shares of Israel's Taro Pharmaceutical citing pricing issues, ending a battle for control of the Israeli generic drug firm.

The development comes after Sun Pharma's nearly five years of bitter legal battle to fully acquire Taro Pharmaceutical, which had agreed to the deal in August 2012.

''Sun Pharma and Taro (at the direction of the special committee) agreed that terminating the merger agreement was in the best interest of the respective companies and shareholders,'' Sun Pharma managing director Dilip Shanghvi said in a conference call.

Sun Pharmaceuticals also said hiking the offer price of Taro would not be in "in the best interest of shareholders".

Sun Pharma had acquired a controlling stake in Taro in September 2010, after nearly four years of legal wrangling. Sun Pharma now holds a majority 66.5 per cent stake in Taro.

Sun Pharma's latest buyout offer of $39.50 per share for 15 million scrips was 61 per cent higher than its previous offer of $24.50, which Taro had rejected.

"Sun Pharma has been considering the reaction of Taro shareholders to the proposed buyout and concluded that Taro's shareholders would be unwilling to approve the merger unless price was increased substantially,'' the company said in a statement.

Taro had, in November 2012, postponed a meeting of shareholders to consider the company's proposed merger with Sun Pharma.

Taro's shares closed at $50.55 apiece on Thursday.