Mylan readies its poison pill defences
Created 04/22/2015 - 17:11
- The Financial Times reported that Teva faces an uphill battle in its $40.1-billion pursuit of Mylan after the latter, which moved its domicile to the Netherlands this year, recently finalised a poison-pill defence that allows its board to issue preferred shares to a Dutch foundation in the event of a hostile bid.
- The defensive move, which is customary in the Netherlands, involves the formation of an independent foundation that can exercise a call option agreement set up between it and the company that would dilute the voting rights of the company's ordinary shareholders.
- However, the news source cited a person familiar with the use of Dutch foundations as a takeover defence who said it is clear in Dutch law that the tactic can only be temporary and it is not allowed to be used permanently to deter a bidder.
- Mylan's move came as speculation of a possible Teva bid for the company resurfaced days before the US company unveiled its own unsolicited $28.9-billion offer for Perrigo, which has since been rejected.