Teva announced Friday that it now owns 4.6 percent of Mylan's outstanding shares, enabling Teva to challenge the Netherlands-based company's rejection of its $40.1-billion takeover bid before the Dutch Enterprise Chamber "should it become necessary." Teva indicated that if Mylan holds a shareholders meeting regarding its own hostile pursuit of Perrigo by August 31, the Israeli drugmaker would limit its stake in Mylan to less than 5 percent.
Mylan moved its domicile to the Netherlands earlier this year after completing the purchase of Abbott's non-US developed markets specialty and branded generics business for approximately $5.3 billion. Mylan has since finalised a poison-pill defence that allows its board to issue preferred shares to a Dutch foundation in the event of a hostile bid.
Citigroup analyst Liav Abraham said "Teva will be able to utilise the Dutch legal system in order to maneuver around potential hurdles surrounding a potential acquisition of Mylan." Abraham suggested Teva would likely make a higher offer, which would trigger the poison pill that would issue new shares to Mylan's foundation, after which the Israeli drugmaker would turn to the chamber to challenge that defence.
Teva has said that its proposal is contingent upon Mylan not completing its planned acquisition of Perrigo, which has already twice rejected Mylan's advances. Earlier this month, Abbott confirmed that it would vote its 14.5-percent stake in Mylan in favour of the Perrigo bid. For related analysis, see ViewPoints: Come to Papa – Perrigo encourages another Mylan bid.
Mylan recently urged Teva to "stop playing games" and either make another formal binding offer to acquire the company or abandon its pursuit altogether, while the Israeli drugmaker has accused Mylan of making "grossly incorrect statements to mislead your stockholders and other stakeholders about us."
To read more Top Story articles, click here.