Taro terminates merger agreement with Sun Pharmaceutical Industries

The merger agreement provided for the acquisition of Taro by Sun for $7.75 per share and allowed either party to terminate after December 31, 2007. While Sun offered to raise the merger price to $10.25 per share, it conditioned this offer on the elimination of a voting threshold required by Israeli law to implement the merger.

The board determined that the merger agreement had become stale and does not reflect the dramatic operational and financial turnaround that the company has achieved since 2007, the future value that the company expects to achieve from the changes made in its business model and the value in its new product pipeline.

In addition, Taro’s board of directors has unanimously determined that Sun’s $10.25 offer is financially inadequate, based on the foregoing factors and the advice received from Taro’s financial advisor, Merrill Lynch, that, based on Taro’s most recent projections, the $10.25 price was inadequate from a financial point of view. The board remains open to considering transactions with third parties that reflect the company’s present operational and financial strength and its outlook for future performance.