Taro Pharma: Citi’s presentation to BOD

Great stuff to look at for Taro holders. I can’t imagine how Citi was able to mess with the numbers to present any valuation that would justify a $39.50 valuation.

10 responses to “Taro Pharma: Citi’s presentation to BOD”

    • i don’t have a specific valuation for Taro. it is clear Sun wants to take it private and is going to have to pay for it. the fair value for Taro is in the 70-100 range. But you have to discount it due to Sun’s majority stake and increased pricing for products that Taro has.

      my take is Sun will have to pay at least $50/share. it could be much higher than that, but i have a hard time believing they can get 50%+ of the minority shareholders to agree to less than $50/share offer.

      there is still a remote possibility that Taro is not take private. maybe Sun has a price target over which it doesn’t make sense for them to take Taro private. i think the chance of this is very slim. but if it does happen, then in the long-run (3-5 yrs) Taro could be worth $100+.

  1. There is a greater chance than you think that minority shareholders will get paid fair value. If you are a TARO shareholder, I would invite you to our google group if you send me your email id to imho_dyodd@yahoo.com or just register here http://stocksdd.blogspot.com/2012/08/taro-shareholders-registry.html. We have ~25 retail shareholders.

    We have sent 2 letters to the board. We believe current fair value of TARO is $120. In an auction with its competitors it could result in further value of $150-$180. Israel has strong protections. 2% of minority can hold. Here are some questions we asked: http://stocksdd.blogspot.com/2012/10/taro-shareholders-salient-questions-to.html

    • The Q2 numbers were good. It clearly shows management expectations are purposefully low-balling the company’s potential. I see it extremely unlikely Sun can succeed w/ its $39.50 offer, given the recent results.

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