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"It's not given to human beings to have such talent that they can just know everything about everything all the time. But it is given to human beings who work hard at it - who look and sift the world for a misplaced bet - that they can occasionally find one." - Charlie Munger I look... More
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  • TARO Is Eventually Going To End Up With One Share Left. 21 comments
    Dec 5, 2013 10:12 AM | about stocks: TARO

    It will be worth $10 billion.

    I intend to own it.

    Taro Announces Commencement of Tender Offer to Repurchase up to $200 Million of Its Ordinary Shares

    HAWTHORNE, N.Y.--(BUSINESS WIRE)--Nov. 25, 2013-- Taro Pharmaceutical Industries Ltd. (NYSE: TARO) ("Taro" or the "Company") announced today that it has commenced a modified "Dutch auction" tender offer to repurchase up to $200 million of its ordinary shares at a price not greater than $97.50 per share nor less than $84.50 per share (the "Offer"). If the Offer is fully subscribed, the number of shares to be purchased in the Offer represents approximately 4.6% to 5.3% of Taro's currently issued and outstanding shares depending on the purchase price payable for those shares pursuant to the Offer. The NYSE closing price of Taro ordinary shares on November 22, 2013, the last full trading day before today's announcement and commencement of this tender offer, was $89.57 per share.

    The Offer will expire at 12:00 midnight, New York City time, on Monday, December 23, 2013, unless extended by Taro. Tenders of shares must be made prior to the expiration of the Offer and may be withdrawn at any time prior to the expiration of the Offer. The Offer will not be conditioned upon any minimum number of shares being tendered; however, the Offer is subject to a number of terms and conditions described in the Offer to Purchase that is being distributed to stockholders.

    Tendering stockholders may specify a price not greater than $97.50 per share nor less than $84.50 per share (in increments of $0.25) at which they are willing to sell their shares pursuant to the Offer. On the terms and subject to the conditions of the Offer, the Company will designate a single per share price that the Company will pay for shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of shares tendered and the prices specified by tendering stockholders. The Company will select the lowest purchase price, not greater than $97.50 per share nor less than $84.50 per share, that will allow it 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"). Only shares validly tendered at prices at or below the Final Purchase Price, and not properly withdrawn, will be eligible for purchase in the Offer. 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. However, due to the "odd lot" priority, proration and conditional tender offer provisions described in the Offer to Purchase, all of the shares tendered may not be purchased if the number of shares properly tendered at or below the Final Purchase Price and not properly withdrawn have an aggregate value in excess of $200 million (based on the Final Purchase Price).

    The Company will purchase only those shares properly tendered and not properly withdrawn upon the terms and conditions of the Offer. All shares accepted for payment will be paid promptly after the expiration of the tender offer period, net in cash, less any applicable withholding taxes and without interest. At the maximum Final Purchase Price of $97.50 per share, the Company would purchase 2,051,282 shares if the Offer is fully subscribed, which would represent approximately 4.6% of the issued and outstanding shares as of November 20, 2013. At the minimum Final Purchase Price of $84.50 per share, the Company would purchase 2,366,863 shares if the Offer is fully subscribed, which would represent approximately 5.3% of the issued and outstanding shares as of November 20, 2013.

    Shares not purchased in the Offer will be returned at the Company's expense promptly following the expiration of the Offer. The Company reserves the right, in its sole discretion, to change the stockholders' per share purchase price options and to increase or decrease the aggregate value of shares sought in the Offer, subject to applicable law.

    As of October 31, 2013, Taro had approximately $741 million in cash and cash equivalents and short-term bank deposits. Taro will use a portion of its cash and cash equivalents and short-term bank deposits to fund the tender offer.

    Stocks: TARO
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Comments (21)
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  • Wilson Wang
    , contributor
    Comments (898) | Send Message
     
    outstanding growth, and extraordinarily cheap!

     

    Why the price discrepancy between its market price and its intrinsic value?
    5 Dec 2013, 12:45 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (6754) | Send Message
     
    Author’s reply » That is the right question, but I don't know the answer.
    5 Dec 2013, 12:56 PM Reply Like
  • pault123
    , contributor
    Comments (66) | Send Message
     
    Because the majority shareholder, Sun Pharma (owns 70% of shares) has been doing everything in its power to hold back Taro and attempting to buy the company on the cheap.

     

    I believe that recent pressure from 2 hedge funds regarding a recent flawed election is forcing some changes. While buying back shares using Taro's huge cash holding is one way to use up the cash it also concentrates Sun's position.
    5 Dec 2013, 01:28 PM Reply Like
  • Wilson Wang
    , contributor
    Comments (898) | Send Message
     
    Excellent answer, and I think the liquidity limits a lot of funds to get into this!
    5 Dec 2013, 01:35 PM Reply Like
  • pault123
    , contributor
    Comments (66) | Send Message
     
    Right. Folks know that Taro is worth more than its current price. See good write ups on the company here on Seeking Alpha. With so few shares in minority hands and normal trading volume since the announcement, my guess is the buyback will be a flop. Maybe it's all for show.
    5 Dec 2013, 02:33 PM Reply Like
  • pault123
    , contributor
    Comments (66) | Send Message
     
    With the stock closing above the $97.50 max repurchase price, it looks like this is the end of the repurchase.
    9 Dec 2013, 07:03 PM Reply Like
  • pault123
    , contributor
    Comments (66) | Send Message
     
    Am kind of surprised Taro found a large number of shareholders willing to let their shares go.

     

    Taro Announces Preliminary Results of Its Self-Tender Offer
    http://yhoo.it/1d6BKD3
    24 Dec 2013, 02:42 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (6754) | Send Message
     
    Author’s reply » Taro Pharmaceutical Industries (TARO) hit a new 52-week high.
    11 Jul 2014, 01:14 PM Reply Like
  • H.S.T.
    , contributor
    Comments (2) | Send Message
     
    One of the top generic Rx co's and no analyst coverage at all.....BUY....
    13 Jul 2014, 10:43 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (6754) | Send Message
     
    Author’s reply » I agree 100%. Wait no... I take it back. I mean sell (to me).
    13 Jul 2014, 10:59 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (6754) | Send Message
     
    Author’s reply » Taro Pharmaceuticals (NYSE:TARO) hits a new 52-week high.
    18 Aug 2014, 12:51 PM Reply Like
  • Mike Serebrennik
    , contributor
    Comments (991) | Send Message
     
    Dang, I wish I heard of this one a couple years ago.
    18 Aug 2014, 09:08 PM Reply Like
  • bazooooka
    , contributor
    Comments (3623) | Send Message
     
    Mike,

     

    I think your still early enough to have a nice risk/adjusted outsized gain compared to most equities. I bought some after it pulled back off 120. I'd think you will get a chance in the 130 or 140s. Ultimately this one is likely going to $170+.
    18 Aug 2014, 09:36 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (6754) | Send Message
     
    Author’s reply » New 52-week high for TARO.
    5 Feb, 04:38 PM Reply Like
  • bazooooka
    , contributor
    Comments (3623) | Send Message
     
    Chris,

     

    Do you have a target for this one? Or do you see potential well above where it's currently at?
    5 Feb, 05:40 PM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (6754) | Send Message
     
    Author’s reply » My $10 billion price target was probably a bit aggressive... but closer to $10 billion than it is today.

     

    I see potential well above where it's currently at, but I don't really have a price target.
    5 Feb, 05:46 PM Reply Like
  • bazooooka
    , contributor
    Comments (3623) | Send Message
     
    Thank you. I have bought the dips a few times and will again as it seems like this one can support $200+ eventually. Dang great call from December 2013. =)
    5 Feb, 07:32 PM Reply Like
  • bazooooka
    , contributor
    Comments (3623) | Send Message
     
    I guess this counts as a 2 month dip. I want to buy in the $130s again but whisper talk makes me think that will be unlikely. Anyhow $146 will still look great from a $200+ come 2016.
    24 Apr, 05:22 AM Reply Like
  • Chris DeMuth Jr.
    , contributor
    Comments (6754) | Send Message
     
    Author’s reply » Linda Evangelista once caught some flack for saying that, "we don't wake up for less than $10,000 a day." It was thought to be snobbery, but I think it was just prioritization.

     

    When SUN calls, "we don't wake up for less than $200 a share."
    24 Apr, 05:38 AM Reply Like
  • robgcon
    , contributor
    Comments (160) | Send Message
     
    bazooooka, your chance to buy in the 130's is here. 200+ will look even better starting at $138!
    30 Apr, 12:50 PM Reply Like
  • bazooooka
    , contributor
    Comments (3623) | Send Message
     
    Yup =)
    23 Jun, 04:31 PM Reply Like
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