UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934

 

TARO PHARMACEUTICAL INDUSTRIES LTD.

(Name of Issuer)

ORDINARY SHARES, PAR VALUE NIS 0.0001 PER SHARE

(Title of Class of Securities)

M8737E108

(CUSIP Number)

Mr. Sudhir V. Valia, Acme Plaza, Andheri Kurla Road, Andheri (East), Mumbai 400 059., India

(Name, Address and Telephone Number of Person Authorized

to Receive Notices and Communications)

May 18, 2007

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because § 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box o.

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 240.13d-7(b) for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

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SCHEDULE 13D

 

 

 

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^* Includes 3,770,833 Ordinary Shares acquired by Alkaloida Chemical Company Exclusive Group Ltd. (“Alkaloida”), an indirect subsidiary of Sun Pharmaceutical Industries Ltd. (“Sun”), on May 21, 2007 and 3,016,667 Ordinary Shares acquired by Alkaloida on May 30, 2007 pursuant to the share purchase agreement dated May 18, 2007 (“Purchase Agreement”), between Alkaloida and the Issuer, which entitled Alkaloida to acquire a total of 7,500,000 Ordinary Shares. This amount also includes 7,500,000 Ordinary Shares which Sun, under certain circumstances, has the right to acquire pursuant to a warrant (the “Warrant”) issued to Sun by the Issuer on May 18, 2007.

 

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^** Based on 36,453,118 Ordinary Shares outstanding as of June 7, 2007 as reported by the Issuer in its Proxy Statement filed on Form 6-K on June 11, 2007 and an additional 6,787,500 Ordinary Shares issuable upon exercise of the Warrant.

 

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SCHEDULE 13D

 

 

 

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^* Includes 3,770,833 Ordinary Shares acquired by Alkaloida on May 21, 2007 and 3,016,667 Ordinary Shares acquired by Alkaloida on May 30, 2007 pursuant to the Purchase Agreement which entitled Alkaloida to acquire a total of 7,500,000 Ordinary Shares.

 

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^** Based on 36,453,118 Ordinary Shares outstanding as of June 7, 2007 as reported by the Issuer in its Proxy Statement filed on Form 6-K on June 11, 2007.

 

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SCHEDULE 13D

 

 

 

 

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^* Includes 3,770,833 Ordinary Shares acquired by Alkaloida, a direct subsidiary of Sun Pharma Global, Inc. (BVI) which is a direct wholly-owned subsidiary of Sun, on May 21, 2007 and 3,016,667 Ordinary Shares acquired by Alkaloida on May 30, 2007 pursuant to the Purchase Agreement which entitled Alkaloida to acquire a total of 7,500,000 Ordinary Shares.

 

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^** Based on 36,453,118 Ordinary Shares outstanding as of June 7, 2007 as reported by the Issuer in its Proxy Statement filed on Form 6-K on June 11, 2007.

 

 

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This Statement on Schedule 13D (this “Statement”) relates to the Ordinary Shares, par value NIS .0001 per share (the “Ordinary Shares”), of Taro Pharmaceutical Industries Ltd. an Israeli corporation (the “Issuer”), whose principal executive offices are located at Italy House, Euro Park, Yakum 60972, Israel.

(a) - (c). This Statement is being filed on behalf of Sun Pharmaceutical Industries Ltd. (“Sun”), Sun Pharma Global, Inc. (BVI) (“Sun Pharma”) and Alkaloida Chemical Company Exclusive Group Ltd. (“Alkaloida”) (collectively, the “Reporting Persons” and each a “Reporting Person”).

Sun is a company organized under the laws of the State of India. Sun Pharma is a company organized in the British Virgin Islands and is a direct wholly-owned subsidiary of Sun. Alkaloida is company organized in the Republic of Hungary and is 99.99% owned by Sun Pharma. Sun and its subsidiaries operate as an international, integrated, specialty pharmaceutical company.

The principal business address of each Reporting Person is:

 

 

(d) - (e) During the last five years, none of the Reporting Persons or any other person identified in response to this Item 2, including those persons listed at Schedule A, was convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors) or was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

During the last five years, to the best of the Reporting Persons’ knowledge, none of the Reporting Persons’ directors or executive officers and none of the persons listed at Schedule A (a) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.

 

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6,787,500 of the Ordinary Shares beneficially owned by the Reporting Persons were directly acquired by Alkaloida as described in Item 4 below with available cash on hand. An additional 6,787,500 of the Ordinary Shares beneficially owned by Sun are shares issuable upon exercise of the Warrant as described in Item 4 below.

On May 18, 2007, Alkaloida, Aditya Acquisition Company Ltd. an Israeli company (“Merger Sub”) established for the purposes of the merger and a wholly-owned subsidiary of Alkaloida, and Taro Pharmaceutical Industries Ltd. (the “Issuer”) entered into a definitive merger agreement (the “Merger Agreement”) whereby Merger Sub will merge with and into the Issuer and each Ordinary Share of the Issuer outstanding immediately prior to the effective time of the merger will automatically be converted into and represent solely the right to receive $7.75 in cash, without interest and less any applicable withholding tax. Upon the closing of the transactions contemplated by the Merger Agreement, the Issuer will become a wholly-owned subsidiary of Alkaloida.

In connection with the Merger Agreement, Taro Development Corporation (“TDC”), holder of approximately 2.3 million Ordinary Shares, Barrie Levitt and Daniel Moros entered into a merger agreement with Sun Development Corporation I (“US Merger Sub”), a wholly-owned subsidiary of Sun Pharmaceutical Industries, Inc., under which US Merger Sub will merge with and into TDC (the “TDC Merger Agreement”). At the closing of the TDC Merger Agreement, which is conditioned upon the consummation of the transactions contemplated by the Merger Agreement, US Merger Sub will merge with and into TDC. Shareholders of TDC will receive consideration for their TDC shares in the aggregate amount equivalent to $7.75 for each Ordinary Share held by TDC, the same per share consideration as the Issuer’s shareholders will receive pursuant to the Merger Agreement.

In connection with the Merger Agreement, Barrie Levitt, M.D. (Director and Chairman of the Board of Directors of the Issuer), Daniel Moros, M.D. (Director and Vice-Chairman of the Board of Directors of the Issuer), Tal Levitt (Director and Secretary of the Issuer), and certain entities under their control entered into voting agreements with Alkaloida whereby they have agreed to vote all of their Ordinary Shares and certain other shares of the Issuer in favor of the approval and adoption of the Merger Agreement and against any competing transaction.

In connection with the TDC Agreement, Barrie Levitt, M.D., Daniel Moros, M.D., Tal Levitt and Jacob Levitt (collectively, the “TDC Shareholders”) entered into a voting agreement with a subsidiary of Sun whereby the TDC Shareholders agreed to vote all of their TDC ordinary shares in favor of the approval and adoption of the TDC Agreement and against any competing transaction.

Furthermore, in connection with the transactions described above, TDC, Barrie Levitt, M.D., Daniel Moros, M.D. and Tal Levitt granted Alkaloida and its affiliates an option (the “Option Agreement”), exercisable for 30 days after termination of the Merger Agreement, or in the event that the Merger Agreement is terminated as a result of an unsolicited third-party acquisition proposal, for 30 days after the definitive acquisition agreement with respect to such third-party acquisition proposal has been terminated, to acquire all securities owned by them for $7.75 per share, including all Ordinary Shares owned by them, provided that Alkaloida and its affiliates commence a tender offer to purchase any and all shares owned by the Issuer’s shareholders at $7.75 per share. In the event that Alkaloida and its affiliates elect to exercise the options under the Option Agreement, Barrie Levitt, M.D., Tal Levitt, Daniel Moros, M.D. and Jacob Levitt agree to vote all securities of TDC beneficially owned by them in favor of the transactions contemplated by the Option Agreement.

 

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Prior to entering into the agreements referred to above, the Issuer advised Sun that they had substantial liquidity issues and that the Issuer would not enter into any of the above contemplated transactions unless Sun or its affiliates provided interim funding to help the Issuer meet its short-term debt obligations. To facilitate the above transactions and in order to provide interim funding to the Issuer in order to meet certain of its short-term debt obligations, Alkaloida and the Issuer entered into a share purchase agreement (the “Purchase Agreement”) on May 18, 2007 pursuant to which Alkaloida agreed to acquire a total of 7,500,000 Ordinary Shares at a price per share of $6.00 for a total purchase price of $45 million. In connection with the Purchase Agreement, Issuer entered into a registration rights agreement, dated May 18, 2007 pursuant to which Issuer agreed to grant certain customary registration rights for Issuer’s shares held by Sun and its affiliates.

On May 10, 2007 and May 19, 2007, Franklin Advisers, Inc. and Templeton Asset Management Ltd. (collectively, “Templeton”), the beneficial owners of approximately 9% of the Ordinary Shares as of such dates, initiated certain court proceedings in Israel regarding the Issuer. As part of such court proceedings, the Issuer and Alkaloida decreased the interim funding pursuant to the Purchase Agreement by 9.5%, from $45 million to $40.725 million. As a result of the court proceedings, Alkaloida acquired 3,770,833 of Ordinary Shares for a total purchase price of $22,624,998 on May 21, 2007 and thereafter acquired an additional 3,016,667 of Ordinary Shares for a total purchase price of $18,100,002 on May 21, 2007.

As of the date of this filing Alkaloida had purchased 6,787,500 Ordinary Shares for a total consideration for $40.725 million. Furthermore, in connection with the above transactions, the Issuer issued to Sun a 3-year warrant to purchase an additional 7,500,000 Ordinary Shares (which, as of the date of this filing, there are 6,787,500 Ordinary Shares underlying such warrant), at an exercise price of $6.00 per share.

If the transactions contemplated by the Merger Agreement are not consummated, Sun and its affiliates will assess all of its options with respect to the Ordinary Shares it beneficially owns depending on all of the facts available to Sun at such time.

The responses of the Reporting Persons to Rows (11) through (13) of the cover pages of this Statement are incorporated herein by reference.

Except as disclosed in this Item 5(a), none of the Reporting Persons nor, to the best of their knowledge, any of the persons listed on Schedule A to this Statement beneficially owns any Ordinary Shares or has the right to acquire any Ordinary Shares.

(a)   The responses of the Reporting Persons to (i) Rows (7) through (10) of the cover pages of this Statement on Schedule 13D and (ii) Item 5(a) hereof are incorporated herein by reference.

Except as disclosed in this Item 5(b), none of the Reporting Persons nor, to the best of their knowledge, any of the persons listed on Schedule A to this Statement presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Ordinary Shares which they may be deemed to beneficially own.

(b)   Except as disclosed in this Statement, none of the Reporting Persons nor, to the best of their knowledge, any of the persons listed on Schedule A to this Statement has effected any transaction in the Shares during the past 60 days or since the most recent filing on Schedule 13D (§ 240.13d-191), whichever is less.

 

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(c)   To the best knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Ordinary Shares beneficially owned by the Reporting Persons.

Except as described above or elsewhere in this Statement or incorporated by reference in this Statement, there are no other contracts, arrangements, understandings or relationships (legal or otherwise) between any of the Reporting Persons or, to the best of their knowledge, any of the persons named in Schedule A to this Statement or between any of the Reporting Persons and any other person or, to the best of their knowledge, any person named in Schedule A to this Statement and any other person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

 

 

 

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SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

Dated:

 

 

 

 

 

 

 

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SCHEDULE A

ADDITIONAL INFORMATION CONCERNING THE REPORTING PERSONS

SUN PHARMACEUTICAL INDUSTRIES LTD.

 

 

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¹ Unless otherwise indicated the Principal Address of each person is the Principal Address of Sun Pharmaceutical Industries Ltd. 17/B, Mahal Industrial Estate, Mahakali Caves Road, Andeheri (East), Mumbai 400 093, India.

² Unless otherwise indicated the Principal Occupation of each person is employment by Sun Pharmaceutical Industries Ltd.

³ As of the April 19, 2007, Dilip Shanghvi holds 23,397,048 Equity Shares of Sun Pharmaceutical Industries Ltd.

 

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SUN PHARMA GLOBAL INC. (BVI)

 

 

 

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⁴ Unless otherwise indicated the Principal Occupation of each person is employment by Sun Pharma Global Inc. (BVI)

 

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ALKALOIDA CHEMICAL COMPANY EXCLUSIVE GROUP LTD.

 

 

 

 

 

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⁵ Unless otherwise indicated the Principal Address of each person is the Principal Office of Alkaloida Chemical Company Exclusive Group Ltd. Kabay János u. 29, H-4440 Tiszavasvari, The Republic of Hungary.

⁶ Unless otherwise indicated the Principal Occupation of each person is employment by Alkaloida Chemical Company Exclusive Group Ltd.

 

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EXHIBIT INDEX