Taro Pharmaceutical Industries Ltd Tender with Odd-Lot Provision

  • Company: Taro Pharmaceutical Industries Ltd
  • Ticker: TARO
  • Market Cap: $4.43B
  • Size of Action: $200mm (4.6% of outstanding)
  • Type of Transaction: modified "dutch" tender offer
  • Current Price: $99
  • Exchange Price: $84.50-$97.50 (Tender Complete at $97.50)
  • Potential Gain (%): N/A
  • Expiration: 12:00 Midnight, New York City Time, December 23, 2013
  • Tender Limit (Shares): 99
  • Max Investment ($): $9,801
  • Max Gain ($): N/A
  • Sec Filing: http://www.sec.gov/Archives/edgar/data/906338/000119312513452979/d633483dex99a1a.htm
  • Summary:  We are conducting the Offer through a procedure commonly called a modified “Dutch auction.” This procedure allows you to either elect to accept the price determined in the Offer or specify a price (in increments of $0.25) not greater than $97.50 per share nor less than $84.50 per share at which you are willing to sell your shares. We will designate a single per share price that we will pay for shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of shares tendered and the prices specified by tendering stockholders. We will select the lowest purchase price, not greater than $97.50 per share nor less than $84.50 per share, that will allow us to purchase ordinary shares having an aggregate purchase price of $200 million, or a lower amount depending on the number of ordinary shares properly tendered and not properly withdrawn (such purchase price, the “Final Purchase Price”). All ordinary shares acquired in the Offer will be acquired at the Final Purchase Price, including those ordinary shares tendered at a price lower than the Final Purchase Price. All payments pursuant to the Offer will be made in United States dollars.
  • Odd Lots: "If more than $200 million in value of the Company’s shares are properly tendered at the Final Purchase Price, we will purchase all shares properly tendered on a pro rata basis, except for “odd lots” (lots held by owners of fewer than 100 shares), which we will purchase on a priority basis..."
  • Notes: Currently outside of profitable range but due to the large share size ($99) even a small spread can net a big gain. Will send out a 2nd note in the case that it does move materially lower.
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