An investigation for investors in Caraco Pharmaceutical Laboratories Ltd. (AMEX:CPD) shares over possible breaches of fiduciary duties was announced after Sun Pharmaceutical Industries and Sun Pharma Global, Inc proposed to take Caraco Phamarceutical Laboratories Ltd over at $4.75 per CPD shares.

On Monday, Dec. 6, 2010, Caraco Pharmaceutical Laboratories, Ltd. (NYSE Amex: CPD) announced that it received a proposal from Sun Pharmaceutical Industries Ltd. and Sun Pharma Global, Inc for a going private transaction by which Sun Pharmaceutical Industries, Sun Pharma Global, Inc, and/or one or more of their affiliates would acquire all of the outstanding shares of Caraco Pharmaceutical Laboratories common stock not held by Sun Pharmaceutical Industries or Sun Pharma Global, Inc for a per share consideration of $4.75 in cash.
Sun Pharmaceutical Industries Ltd. and Sun Pharma Global, Inc said that the offer represents a 5% premium over the most recent closing price of Caraco Pharmaceutical Laboratories common stock and a compelling value realization event for [Caraco Pharmaceutical Laboratories] stockholders.

An investigation by a law firm concerns whether the offer is inadequate and grossly unfair. Shares of Caraco Pharmaceutical Laboratories Ltd. (Public, AMEX:CPD), which traded days before the announcement at roughly $4.75 per share, increased immediately in response to the takeover proposal above the buyout offer to $5.13 per share. Additionally CPD shares traded as recently as October 18 and Oct 8 over $5.80 per share in the open market. Furthermore during August and April CPD shares exceeded $6.60 per share as Caraco Pharmaceutical Laboratories has performed well for its investors in the past. The 12months Total Revenue of Caraco Pharmaceutical Laboratories Ltd. rose from $117.03million to $233.67million over the past four filing periods.
Further the investigation by a law firm questions also whether the sale process is unfair to CPD investors given the fact that Sun Pharmaceutical Industries Ltd. and Sun Pharma Global, Inc own already approximately 75% of Caracos outstanding shares and whether the board of directors will adequately shop Caraco Pharmaceutical Laboratories before entering into any transaction.