Pharmaceutical company Mylan NV is committing itself to being listed on the Tel Aviv Stock Exchange (TASE) for at least one year if its offer to purchase for Perrigo Company (NYSE:PRGO; TASE:PRGO) is unsuccessful, and for at least three years if it is successful. This was revealed by the Israel Securities Authority's answer to the court hearing Perrigo's petition for a restraining order against Mylan's offer to purchase. The case was heard today, but no ruling or temporary order was issued. Another hearing is scheduled for October 27.
Perrigo is alleging that Mylan did not publish an offer to purchase for Perrigo shares in Israel, as legally required. One of Perrigo's pleas was that Mylan must publish a prospectus cleared for publication by the Securities Authority as part of its offer to purchase, which is also directed at the Israeli public.
According to the Security Authority's position, the fact that Perrigo is also listed for trading in Israel, its considerable volume of trade in Israel, and the absence of any explicit exemption from the duty to publish a prospectus means that under the existing circumstances, the public has an interest in the offer to purchase. The Securities Authority holds that Mylan is obligated to publish a prospectus. An exemption from this obligation can be obtained by a dual-listed company (on the TASE and overseas), and the Securities Authority also addresses the possibility of Mylan being listed for trading on the TASE, given the fact that its share capital includes two types of shares: ordinary and preferred. As part of the poison pill aimed at preventing a takeover of Mylan by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), Mylan granted a Dutch fund an option to purchase shares in it. The fund exercised this option when Teva was attempting its takeover. According to the Securities Authority, as part of Mylan's plan to have its shares listed on the TASE, and given the problems with listing companies having more than one type of share, Mylan notified the Securities Authority that it would cancel its preferred shares, thereby making the poison pill dormant. The poison pill can nevertheless still be activated at any time.
No barrier to Mylan dual-listing
According to the Securities Authority, the right interpretation is that there is nothing to prevent Mylan from being a dual-listed company, even with the agreement with the Dutch fund - provided that the special shares possessed by the fund are canceled before Mylan's shares are listed on the TASE, or Mylan makes clear that the shares will be canceled as soon as possible, and cannot be used during the interim period before this happens. If the option agreement is activated again after Mylan's shares are listed for trading, Mylan will be delisted from the TASE.
The Securities Authority says that the commitment to at least one year of listing on the TASE is designed to prevent a situation in which the dual listing "enables (Mylan, S.H.-V.) to artificially evade publishing a complete prospectus as required by law."
Published by Globes [online], Israel business news - www.globes-online.com - on October 14, 2015
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