Sun Pharma has offered to acquire the shares it doesn't already own in Taro Pharmaceutical Industries, in which it is a majority shareholder, for $38 apiece, the company said in a press release on May 27.

Sun Pharma currently owns a 78.48 percent stake in Taro.

Taro, whose shares are up 25 percent in after-hours trading on May 26, has formed a special committee to evaluate the offer.

According to the release, the $38 per share offer represents a 32 percent  premium over Taro's closing price on May 25 and a 41.5 percent premium over the average closing price of the ordinary shares over the last 60 trading days.

The proposal is for an all-cash transaction to acquire all outstanding stock of Taro, such that following the transaction, Sun Pharma will own 100 percent of the stock.