In recent buyback offer, Sun ( yes you read it correctly, Sun , not Taro) is offering a maximum premium of %2.6 over current price of $95 – this is ridiculous !! (max of 97.5, is $2.5 over today’s close of $95) - a This move will will increase Sun’s ownership in Taro by %4.6 – this is another trick by Sun to get rid of the minority one step at a time.
FYI, Sun’s EV/EBITDA is 18.2, Taro’s EV/EBITDA is 8.9 - Sun is responsible for Taro’s low valuation.
Therefore, Taro’s real value is $95*18.2/8.9 = $194.26
In a buy back with 30 premium it should be $255.55
In light of these numbers it is clear that Sun’s maximum offer of $97.5 is onlyh %38 of Taro’s real value.
In the past Taro’s minority rejected Sun’s offer, and were rewarded handsomely by more than doubleing their money in just few months.
The current buyback offer is the worst.
I think it makes no sense to tender Taro’s shares, and if already tendered it can still be withdrawn!!
Price reached $97.80 - upper limit of offer is overwhelmed!!!
this is another nail in the coffin of the ridiculous buyback offer.
It looks like Sin pharma will never learn that insulting the minority intelligence is the wrong way for them to go !!
Share buy back is no more that financial engineering- No new value has been created by the company, except it is $200 short, and Sun increases its ownership by about %5 without investing a penny- without even offering a real premium price went up from 90 to 95,5, about %6 premium.)
I think it is a big mistake to tender under such a sleazy scheme, especially when you don't know what is the final price.