Capitalist World Posted February 7, 2013 Share Posted February 7, 2013 This Israeli company is new holding for me and looks undervalued, and a fight for control is raging putting upward pressure on the stock. http://www.prnewswire.com/news-releases/raging-capital-calls-on-taro-pharmaceutical-shareholders-to-vote-against-the-taro--sun-pharma-merger-170313136.html http://stocksdd.blogspot.ca/2013/02/taro-continues-to-post-strong-and.html Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 7, 2013 Share Posted February 7, 2013 You may want to look how Caraco Pharmaceutical was taken private by Sun Pharma (that controls Taro I believe). Similar to the Dell situation. http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/ideas-on-how-to-oppose-a-going-private-offer/msg36250/#msg36250 Link to comment Share on other sites More sharing options...
Capitalist World Posted February 7, 2013 Author Share Posted February 7, 2013 As I understand it under Israeli law a majority of the minority shareholders is required for Sun to succeed. It will be a fight and it is not without risk but it seems too cheap at this point. Link to comment Share on other sites More sharing options...
PlanMaestro Posted February 7, 2013 Share Posted February 7, 2013 As I understand it under Israeli law a majority of the minority shareholders is required for Sun to succeed. It will be a fight and it is not without risk but it seems too cheap at this point. When arbitrageurs get control of a situation, those type of restrictions usually do not mean much. Link to comment Share on other sites More sharing options...
JBird Posted February 8, 2013 Share Posted February 8, 2013 To CapitalistWorld: I'm curious about why you believe Taro is undervalued. Would you mind explaining your valuation? Link to comment Share on other sites More sharing options...
Phaceliacapital Posted February 8, 2013 Share Posted February 8, 2013 There is also a write up on VIC on Nov 16 2012 that you can check out. I tend to stay away from pharma so it is a no go for me. Link to comment Share on other sites More sharing options...
zippy1 Posted February 8, 2013 Share Posted February 8, 2013 The merger is called off. Interesting.... http://finance.yahoo.com/news/sun-pharma-taro-announce-termination-123000727.html HAWTHORNE, N.Y. & MUMBAI, India--(BUSINESS WIRE)-- Taro Pharmaceutical Industries Ltd. (TARO) (“Taro”) and Sun Pharmaceutical Industries Ltd. (Reuters: SUN.BO, Bloomberg: SUNP IN, NSE: SUNPHARMA, BSE: 524715) (together with its subsidiaries, “Sun Pharma”) announced today that they have mutually agreed to terminate their merger agreement, announced in August 2012, pursuant to which all shareholders of Taro (other than Sun Pharma and its affiliates) would have received a cash payment of $39.50 per share upon the closing of the merger. Each of 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. Link to comment Share on other sites More sharing options...
zippy1 Posted February 13, 2013 Share Posted February 13, 2013 CFO's interview with CNBC. Looks like this taking private will be off for a while. http://www.moneycontrol.com/news/results-boardroom/sun-pharma-to-continue-holding-staketaro-says-vp-fin_822359.html Q: What is the plan with Taro now going forward, you just keep it as a company in which you have a significant shareholding, that is it? A: Currently, that is the plan. Q: Any room at all for renegotiation on Taro or is that a closed chapter? A: It is a closed chapter. Link to comment Share on other sites More sharing options...
Cunninghamew Posted July 15, 2013 Share Posted July 15, 2013 CW - you still in this and any updated thoughts? I just stumbled across the co. $2.67 bill mkt cap, $553 mm of cash, $28 mm of debt --> EV $2.145 and did FCF of $238 mm last year... i.e. a 11% yield. I realize the major risk is getting screwed over by Sun, but so far it looks like the minority shareholders have been able to stave this off. I.e. Isreali shareholder right laws are stringent I also saw the article saying Sun is backing off. If Sun is no longer active, but they do control the fate of the co. what do they do? Divy the cash back or put a buy back in place given the current valuation Link to comment Share on other sites More sharing options...
walt373 Posted November 1, 2015 Share Posted November 1, 2015 Anyone in this? The stock still looks cheap at 11.5 PE and since they focus on generic dermatology drugs, they could benefit from VRX's Philador getting shut down. Link to comment Share on other sites More sharing options...
feynmanresearch Posted November 1, 2015 Share Posted November 1, 2015 Anyone in this? The stock still looks cheap at 11.5 PE and since they focus on generic dermatology drugs, they could benefit from VRX's Philador getting shut down. I'm considering starting a position in it Link to comment Share on other sites More sharing options...
ccplz Posted November 1, 2015 Share Posted November 1, 2015 Any thoughts on the ownership situation? Link to comment Share on other sites More sharing options...
walt373 Posted November 8, 2015 Share Posted November 8, 2015 From what I've seen, it's not a huge factor. Management has done well for shareholders over the past few years and Israel has good minority shareholder protection should Sun Pharma try another lowball buyout. Link to comment Share on other sites More sharing options...
Capitalist World Posted November 22, 2015 Author Share Posted November 22, 2015 I am out of TARO now at $152 but would consider a purchase in future. Link to comment Share on other sites More sharing options...
Madrem Posted March 27, 2016 Share Posted March 27, 2016 Does anyone have any thoughts on valuation of TARO ? With more than a billion dollars in cash and no debt, is the majority owner Sun Pharma trying to squeeze the minority buy preventing TARO from acquiring new assets and/or expanding into new territories? Are the recent $250 million buyback intended to increase the ownership of Sun pharma in Taro ? What is preventing Sun from buying out TARO at a fair valuation instead of playing the proxy ownership game ? Any thoughts are appreciated. Link to comment Share on other sites More sharing options...
Madrem Posted March 28, 2016 Share Posted March 28, 2016 Capitalist, What are your thoughts on the recent buyback announced? Do you think the goal is to consolidate majority ownership , now at 70% (around 80% voting rights) or do you think the mgmt seriously feels that the stock is undervalued? I personally do not feel that the mgmt has any desire to see improvement in stock price. They would not care if the stock trades at $1 or $200. Is squeezing minority and enriching themselves their only goal? Any thoughts will be appreciated. Link to comment Share on other sites More sharing options...
Capitalist World Posted December 17, 2016 Author Share Posted December 17, 2016 I am back into Taro now after exiting at $152 in March 2015 here's an updated look at the Share ownership and Sun's continued pursuit of Taro WITHOUT paying a respectable premium March 31 2016 shares outstanding: 42,765,934 Shares owned by Sun 29,553,000 or 69% Votes owned by Sun 79.3% After March $250M Buyback@$138.80 40,964,835 Sun's ownership rises to 72.1% Voting Control rises to 82.9% Projected after Nov $250M buyback@$108 38,650,020 Sun's ownership rises to 76% Voting Control rises to 88% Sun can go up to 90% ownership of Taro without submitting a buyout offer to minority. Anything above 90% must be purchased through a buyout offer. Once Sun reached 95% ownership, the remaining hold-outs are forced to submit their Taro's shares to Sun for the buyout price. However, according to the Israeli company laws, even an investor who already submitted to Sun has the right to ask the Israeli court to rule that the buyout price was low and unfair. and the court may rule that indeed this is the case and it will force Sun to pay the difference between what the court thinks is a fair price and the buyout price. My guess is that Taro concludes the current buyout by the end of 2016 and in Feb-Mar 2017 launches a third $250M buyback until Sun's voting control nears 95% at which time they will be forced to launched a proper buyout for the remaining shares at an extremely attractive premium (but for a small amount of shares) I estimate it will take $175 to get the balance. We can discuss the ethics of the Sun power play and using Taro's own cash for Sun's corporate goas, suppressing Taro's expansion plans, lack of independent voices at Taro etc.. at the end of the day Sun is playing the long game and slowly and quietly strangling the minority shareholders into submission. Let's not go down quietly. Link to comment Share on other sites More sharing options...
Guest roark33 Posted December 19, 2016 Share Posted December 19, 2016 What's preventing Sun from going up to 89% and just stopping. Are there any benefits to owning the whole thing, tax wise, etc. Link to comment Share on other sites More sharing options...
constala Posted January 12, 2017 Share Posted January 12, 2017 I am not familar with Israeli takeover code. I would like to check if the Full Take Over condition of 90% applies to % of shares, or if voting rights matter. It would require to bring Sun's 29.55m ownership to 90% to retire 5.8 m share from the current post buyback 38.65m estimate- thats about $627m budget; quite distant. Or is the FTO dependent on the voting rights (much closer threshold)? Link to comment Share on other sites More sharing options...
ccplz Posted January 13, 2017 Share Posted January 13, 2017 http://economictimes.indiatimes.com/markets/stocks/news/what-class-action-suit-against-taro-means-for-sun-pharma/articleshow/56096024.cms Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now