Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has bumped into a difficult hurdle in its attempt at a hostile takeover of Mylan Pharmaceuticals. Dutch fund Stichting today announced that it would activate a "poison pill" by exercising its call option to prevent the attempt to take over Mylan.
It said, "The Stichting Preferred Shares Mylan has formed its independent judgment that Mylan N.V.’s best interests and those of its broader stakeholder constituencies are at risk as a consequence of the uncertainty and threats associated with a possible takeover of Mylan by Teva Pharmaceutical Industries Ltd. The Stichting has come to this conclusion on the basis of the hostile character of Teva’s approach, as well as an extensive review of public filings, press statements and investor presentations by both Teva and Mylan, and input received from numerous industry experts, suppliers, customers, consumer groups, patient associations, NGOs and similar Mylan stakeholder groups."
Teva will now have to petition the commercial court in the Netherlands in an attempt to block the maneuver.
The Mylan share price fell 1.2% in early Wall Street trading, while the Teva share was down 2% in Tel Aviv Stock Exchange (TASE) trading.
The Dutch fund said that the measure was in the interests of Mylan's shareholders. It said it would not continue holding preferred shares in Mylan longer than necessary.
Teva said in response, "We strongly disagree with the stated analysis of Stichting Preferred Shares Mylan and its decision to exercise its call option, which is unwarranted, relies on false assumptions, and risks depriving Mylan stockholders and other stakeholders of the value inherent in a combination of Teva and Mylan. We continue to believe that our proposed transaction offers a compelling opportunity for value-creation and many other benefits for the stockholders, customers, patients, and employees of both companies. We are well advised on Dutch law, including the ability of Mylan stockholders to challenge this action in court, and are prepared to take the necessary actions at the appropriate time."
Teva offered to acquire Mylan for $40.1 billion. Mylan's management and board of directors rejected the offer, claiming that the regulators would oppose the deal, with Mylan chairman Robert Coury severely criticizing Teva's corporate governance and management.
Teva has spent $1.5 billion on buying 4.6% of Mylan's shares in recent months in an attempt to make progress in its takeover. A Mylan shareholders meeting is scheduled for next month to decide whether or not to accept the deal.
Published by Globes [online], Israel business news - www.globes-online.com - on July 23, 2015
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