Mumbai: An Israeli court has ruled in favour of Sun Pharma in the Taro takeover case, rejecting the Israeli company's contention that Sun Pharma should have conducted a ''special tender offer'' under Israeli law.

Sun Pharmaceutical Industries Ltd will now be in a position to complete the previously announced tender offer by its subsidiary, Alkaloida Chemical Company Exclusive Group Ltd, Sun Pharma said in a website release.

Sun Pharma said the court has accepted all elements of its defence of the litigation brought against it in the Tel-Aviv District Court by Taro Pharmaceutical Industries Ltd and some of its directors.

''Following the closing of the tender offer, all conditions to Sun Pharma's option agreement to acquire all the shares held by the controlling shareholders of Taro will be satisfied and the controlling shareholders will have to deliver their shares,'' the release said.

It is ''disingenuous'' for Taro's directors to claim now, over a year after they approved the transaction, that a special tender offer was required, the court observed.

The directors should have ''studied the agreements" prior to their being signed, and should have confirmed then that they were in the company's best interest, Judge  Michal Agmon-Gonen J said, adding, the directors cannot claim now that they suddenly decided a special tender offer is necessary.

''It is clear, based on yesterday's ruling that the lawsuit by Taro's independent directors was part of a calculated effort by Barry Levitt to avoid living up to his obligations under the option agreement. It is time for Dr Levitt and his family to live up to the contract and do what is required of them under the option agreement,'' Dilip Shanghvi, chairman and managing director of Sun Pharma, said.

With respect to those directors who are also shareholders, the court stated that ''these shareholders benefited from Sun's investment, which basically saved Taro from collapse,'' and characterised their conduct in challenging Sun Pharma's exercise of its contractual option as ''grave.''

The court also ordered Taro and the other plaintiffs to pay Sun Pharma's costs related to the litigation.

The complete terms and conditions of the tender offer are set out in the offer to purchase, which is filed with the US Securities and Exchange Commission, Sun Pharma said in a release.

Sun Pharma said it will file an amendment to its previously announced tender offer by its subsidiary, Alkaloida. The amendment provides for the waiver of certain conditions to the tender offer, including the condition that the controlling shareholders of Taro have performed their obligations under their option agreement with Sun Pharma. Sun is not aware of any other conditions that would not be satisfied if the tender offer were to expire today and is preparing to close the tender offer, it said.

In order to permit proper dissemination of the amendment, Alkaloida has extended the expiry date of the tender offer by one day to 5:00 pm, New York City time, on 3 September 2008, the release added.

As of 5:00 pm, New York City time, on 26 August 2008, 3,627 ordinary shares had been tendered and not withdrawn from the tender offer, it said.

The US Federal Trade Commission (FTC) has already granted early termination of the antitrust waiting period under the Hart-Scott-Rodino Act (HSR) for the
previously announced tender offer by Alkaloida, Sun Pharma said in a separate release.

Greenhill & Co, LLC is acting as the dealer manager for the tender offer and MacKenzie is acting as the i Information agent for the tender offer, it added.

Based in India, Sun Pharmaceutical Industries Ltd is a integrated, speciality pharmaceutical company, manufacturing and marketing a large basket of pharmaceutical formulations as branded generics as well as generics in India, the US and several other markets across the world.

In India, the company is a leader in niche therapy areas of psychiatry, neurology, cardiology, diabetology, gastroenterology, and orthopedics.