Biggest Pharma Takeover Duel May Play Out in Amsterdam Court
2015-06-18 06:47:13.482 GMT
By David Wainer
(Bloomberg) -- As Teva Pharmaceutical Industries Ltd.
builds up a stake in fellow generic-drug maker Mylan NV, a
little-known Dutch court could become a crucial battleground in
the year’s biggest pharmaceutical takeover struggle.
Teva owned 4.31 percent of Mylan on Thursday, nearing the
4.6 percent threshold needed to initiate proceedings at the
Enterprise Chamber in Amsterdam. It began snapping up shares
after its $40.1 billion takeover offer was rebuffed by Mylan,
which last year relocated to the Netherlands and adopted a
poison pill provision to thwart hostile takeovers.
Teva will likely keep buying shares and use the Dutch
registration to its advantage, Liav Abraham, an analyst for
Citigroup Inc. in New York, said in a note to clients. The most
likely scenario is for Israel’s Teva to sweeten its offer,
triggering a Mylan poison pill that consists of issuing new
shares to a foundation, then turn to the chamber to challenge
that defense, according to Abraham.
“Teva will be able to utilize the Dutch legal system in
order to maneuver around potential hurdles surrounding a
potential acquisition of Mylan,” she said.
It wouldn’t be the first time the chamber, a special
appeals court for shareholder disputes, is at the center of a
takeover battle. It sided with ABN Amro Holding NV shareholders
in a case related to the 2007 acquisition of the Dutch bank by
Royal Bank of Scotland Group Plc and its partners Banco
Santander SA and Fortis, though the Supreme Court eventually
overturned the decision.
Next Step
John Paulson’s hedge fund Paulson & Co., which has also
been boosting its stake in Mylan, also turned to the same Dutch
court to cancel prefered shares issued by Stork NV in 2007.
Stork had set up the same defense as Mylan to remain
independent, creating a Dutch foundation known as a stichting.
The ruling paved the way for the Dutch builder of airplane parts
to be sold to Candover Investments Plc.
Spokespeople at Teva and Mylan didn’t immediately reply to
a request for comment.
Teva may argue that Mylan’s board isn’t acting in the
interest of shareholders, Abraham wrote in a report on June 12.
At the same time, it may keep buying Mylan shares or join with
other shareholders to gain a 10 percent stake, at which point it
will have the right to call a shareholder meeting under Dutch
law.
Mylan, based in Canonsburg, Pennsylvania, has rejected
Teva’s offer and argued it makes more sense to pursue its own
takeover of drugmaker Perrigo Co. for about $32.7 billion.
Mylan’s Dutch foundation named Lazard as its financial adviser
on June 11, a week after saying it had concerns about Teva’s
purchases of Mylan shares on the open market.
Mylan shareholders will get to vote on the Perrigo deal at
a meeting in July or August. The vote will effectively be a
referendum on the Teva offer, since the Petach Tikva, Israel-
based company has said it will walk away if the Perrigo deal is
approved. Mylan’s largest shareholder, Abbott Laboratories, has
already said it will back Mylan’s management.
For Related News and Information:
Perrigo CEO Is Ready to Talk Deal With Mylan at Right Price
Actavis CEO: Teva-Mylan Deal Overlap ’Value Destroying’
Teva Said to Seek $25 Billion in Financing for Mylan Deal
Teva earnings graph: TEVA IT <Equity> FA ISBAR <GO>
Mylan product data: MYL US <Equity> FA PROD <GO>
Top health-industry news: TOP HEA <GO>
--With assistance from Martijn van der Starre in Amsterdam and
Drew Armstrong in New York.
To contact the reporter on this story:
David Wainer in Tel Aviv at +972-3-542-7110 or
dwainer3@bloomberg.net
To contact the editors responsible for this story:
Chitra Somayaji at +44-20-3525-9717 or
csomayaji@bloomberg.net
Marthe Fourcade
2015-06-18 06:47:13.482 GMT
By David Wainer
(Bloomberg) -- As Teva Pharmaceutical Industries Ltd.
builds up a stake in fellow generic-drug maker Mylan NV, a
little-known Dutch court could become a crucial battleground in
the year’s biggest pharmaceutical takeover struggle.
Teva owned 4.31 percent of Mylan on Thursday, nearing the
4.6 percent threshold needed to initiate proceedings at the
Enterprise Chamber in Amsterdam. It began snapping up shares
after its $40.1 billion takeover offer was rebuffed by Mylan,
which last year relocated to the Netherlands and adopted a
poison pill provision to thwart hostile takeovers.
Teva will likely keep buying shares and use the Dutch
registration to its advantage, Liav Abraham, an analyst for
Citigroup Inc. in New York, said in a note to clients. The most
likely scenario is for Israel’s Teva to sweeten its offer,
triggering a Mylan poison pill that consists of issuing new
shares to a foundation, then turn to the chamber to challenge
that defense, according to Abraham.
“Teva will be able to utilize the Dutch legal system in
order to maneuver around potential hurdles surrounding a
potential acquisition of Mylan,” she said.
It wouldn’t be the first time the chamber, a special
appeals court for shareholder disputes, is at the center of a
takeover battle. It sided with ABN Amro Holding NV shareholders
in a case related to the 2007 acquisition of the Dutch bank by
Royal Bank of Scotland Group Plc and its partners Banco
Santander SA and Fortis, though the Supreme Court eventually
overturned the decision.
Next Step
John Paulson’s hedge fund Paulson & Co., which has also
been boosting its stake in Mylan, also turned to the same Dutch
court to cancel prefered shares issued by Stork NV in 2007.
Stork had set up the same defense as Mylan to remain
independent, creating a Dutch foundation known as a stichting.
The ruling paved the way for the Dutch builder of airplane parts
to be sold to Candover Investments Plc.
Spokespeople at Teva and Mylan didn’t immediately reply to
a request for comment.
Teva may argue that Mylan’s board isn’t acting in the
interest of shareholders, Abraham wrote in a report on June 12.
At the same time, it may keep buying Mylan shares or join with
other shareholders to gain a 10 percent stake, at which point it
will have the right to call a shareholder meeting under Dutch
law.
Mylan, based in Canonsburg, Pennsylvania, has rejected
Teva’s offer and argued it makes more sense to pursue its own
takeover of drugmaker Perrigo Co. for about $32.7 billion.
Mylan’s Dutch foundation named Lazard as its financial adviser
on June 11, a week after saying it had concerns about Teva’s
purchases of Mylan shares on the open market.
Mylan shareholders will get to vote on the Perrigo deal at
a meeting in July or August. The vote will effectively be a
referendum on the Teva offer, since the Petach Tikva, Israel-
based company has said it will walk away if the Perrigo deal is
approved. Mylan’s largest shareholder, Abbott Laboratories, has
already said it will back Mylan’s management.
For Related News and Information:
Perrigo CEO Is Ready to Talk Deal With Mylan at Right Price
Actavis CEO: Teva-Mylan Deal Overlap ’Value Destroying’
Teva Said to Seek $25 Billion in Financing for Mylan Deal
Teva earnings graph: TEVA IT <Equity> FA ISBAR <GO>
Mylan product data: MYL US <Equity> FA PROD <GO>
Top health-industry news: TOP HEA <GO>
--With assistance from Martijn van der Starre in Amsterdam and
Drew Armstrong in New York.
To contact the reporter on this story:
David Wainer in Tel Aviv at +972-3-542-7110 or
dwainer3@bloomberg.net
To contact the editors responsible for this story:
Chitra Somayaji at +44-20-3525-9717 or
csomayaji@bloomberg.net
Marthe Fourcade