Permian Investment Partners Opposes Sun Pharmaceutical's Offer to Acquire Taro Pharmaceutical Industries at $24.50 Per Share

Nov 14, 2011, 18:52 ET from Permian Investment Partners

NEW YORK, Nov. 14, 2011 /PRNewswire/ --

Permian Investment Partners urges Taro Pharmaceutical's (Pink Sheets: TAROF) Board of Directors and all minority shareholders to reject Sun Pharmaceuticals proposal and retain independent counsel to obtain an unbiased assessment of fair value.

Dear Members of the Board of Taro Pharmaceutical Industries Ltd.:

As another large, unaffiliated shareholder of Taro Pharmaceutical Industries Ltd. ("Taro" or the "Company"), we are writing to indicate our unconditional concurrence with those that have spoken out in opposition of $24.50 per share offer for all outstanding Taro shares not currently owned by Sun Pharmaceutical Industries ("Sun").

Permian Investment Partners ("Permian") is a global, long-term investment firm whose philosophy centers around investing behind best-in-class management teams who act as change agents to create significant value for shareholders.  Somewhat ironically, it was Sun's original entry into the share capital that, in our view, put in place the stewardship that gave us the assurances that full value would be extracted by unquestionably experienced value creators at the helm.  

Our firm had the opportunity to sit down with Mr. Dilip Shanghvi last year to better grasp his plan to optimize value at Taro after fighting tooth-and-nail for its control. While we were overwhelmed by Mr. Shanghvi's humility, we were puzzled by the contained nature of his enthusiasm for Taro's potential for revenue growth and margin expansion under his leadership; particularly in light of how hard he fought to obtain control of the asset and his undeniably impressive track-record for value creation.  It is only now, in context of Sun's bid that values Taro at just 4.5x annualized depressed free cash flow that his choice to contain his zeal for the transaction makes sense.  It also explains why, despite having had ample time to do so, the Board never moved the Company back to a regular listing like the NYSE or Nasdaq, despite displaying great interest in our firm's opinion last year as to which would be the more appropriate choice.

We won't beat a dead horse and reiterate the valuation metrics that yield a range of fair values between $45 and $80 a share for Taro, because we are confident that any independent advisor retained by the Board will do a thorough job in educating board members on this subject.  We simply want to inform the Board of Directors that we intend to fervently protect the value of our investment in Taro on behalf of our limited partners, in accordance with our fiduciary duties, and will not part with the shares at a level that does not reflect fair value.


Permian Investment Partners

SOURCE Permian Investment Partners