(JNi.media) Mylan NV’s independent foundation, in an attempt to resist a hostile takeover by Teva Pharmaceutical Industries Ltd., activated a “poison pill” by deciding to exercise an option to grab control of half of the company. Teva was proposing a $40.1 billion acquisition of Mylan, looking to boost its generic-drug offering with an estimated $27 billion in revenue, Bloomberg reported.
Mylan believes the Israel-based Teva is a “poor cultural fit.” Now if Teva wants to gain a majority of Mylan’s shares it would have to approach the shareholders directly or force the foundation to reverse its move through the Dutch courts.
The Dutch foundation, known as a stichting foundation—a Dutch legal entity with limited liability, but no members or share capital, that exists for a specific purpose—said in a statement that it aims to protect the best interest of Mylan’s stakeholders, and it won’t keep the preferred shares any longer than necessary.
The Mylan statement said: “The Stichting Preferred Shares Mylan has formed its independent judgment that Mylan N.V.’s best interests and those of its broader stakeholder constituencies are at risk as a consequence of the uncertainty and threats associated with a possible takeover of Mylan by Teva Pharmaceutical Industries Ltd. The Stichting has come to this conclusion on the basis of the hostile character of Teva’s approach, as well as an extensive review of public filings, press statements and investor presentations by both Teva and Mylan, and input received from numerous industry experts, suppliers, customers, consumer groups, patient associations, NGOs and similar Mylan stakeholder groups.”
Teva responded: “We strongly disagree with the stated analysis of Stichting Preferred Shares Mylan and its decision to exercise its call option, which is unwarranted, relies on false assumptions, and risks depriving Mylan stockholders and other stakeholders of the value inherent in a combination of Teva and Mylan. We continue to believe that our proposed transaction offers a compelling opportunity for value-creation and many other benefits for the stockholders, customers, patients, and employees of both companies. 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.”
Like they said, it’s a poor culture fit.