Wannabe acquirer Teva ($TEVA) has built up a 4.6% stake in generics rival Mylan ($MYL)--and that's enough for the newly Dutch pharma. Mylan's independent foundation--known in Dutch as a stichting--has exercised an option to acquire shares that let it control 50% of the company, part of its plan to fend off a hostile takeover.
With the move, the stichting "intends to use the voting rights on its shares to create a level playing field," it said in a statement. As Bernstein analyst Ronny Gal wrote in a note to investors, that likely means the stichting is planning to vote 4.6% of its shares in favor of an alternate deal for Perrigo ($PRGO) that would spoil Teva's efforts.
Why? "The stichting has established that Mylan and Teva, although both large and successful players in the global market for generic products, have a highly dissimilar business approach, culture, financial model and related management compensation schemes," it said in a statement, claiming that Mylan's best interests--and those of its shareholders--are at risk.
|Mylan chairman Robert Coury|
That position echoes that of Mylan's chairman, Robert Coury, who has repeatedly slammed a tie-up and harped on the companies' differences since Teva made its $40-billion-plus advance. But Teva has countered Mylan's arguments of a fundamentally bad fit, urging its target to come to the table and quit forcing its investors toward an "inferior" Perrigo transaction.
So unsurprisingly, the Israeli pharma didn't much like the stichting's analysis of the situation, arguing in a statement that it "relies on false assumptions." And Teva warned it's not about to sit back, either.
"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," the company said.
- read the stichting's statement (PDF)
- see Teva's response
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