Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) has raised its stake in Mylan (MYL) to 2.2% in its efforts to accomplish a takeover of its US rival in a $40 billion bid, while Mylan itself continues its attempt to take over Perrigo (PRGO).
On June 4, Teva held 10.5 million Mylan shares. Last week, Teva announced that it had purchased shares in Mylan and that it held 1.8% of the company. The latest share purchase was made on Thursday, when Teva bought shares at prices ranging between $71.7 and $74.2.
Teva's build-up of its stake in Mylan not only testifies to the seriousness of its bid for the company, but also puts it in a position of strength in the lead-up to the vote on its bid by Mylan's shareholders.
Reuters points out that US antitrust legislation forbids a company to acquire a stake in a rival company worth over $76.3 million without prior approval. Teva's current stake in Mylan exceeds this amount. Companies in violation of the rules can be fined millions of dollars a day, but Teva believes it is within the law because Mylan is registered in the Netherlands, whereas Mylan, whose principal offices are in the US, claims that it is entitled to the protection of US antitrust law, Reuters reports. Reuters adds that the US Federal Trade Commission has refused to say whether it is investigating Teva in relation to its purchases of Mylan shares, and also that if it reaches a 4.6% stake in Mylan, Teva will be able to challenge the company in the Netherlands courts over its refusal to negotiate a merger.
Published by Globes [online], Israel business news - www.globes-online.com - on June 7, 2015
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