Reuters has learned Teva looks to buy more shares in Mylan. Sources say that could allow Teva to take Mylan to court in the Netherlands. Fred Katayama reports.
Teva's next move could make Mylan's migraine worse. Reuters has learned that Teva Pharmaceutical plans to more than double its stake in its generic rival to roughly 4.6 percent. This news comes just one week after the Israeli drugmaker disclosed it has already accumulated a 1.8 percent stake in Mylan, which had rejected its takeover bid. Sources say the higher stake would allow Teva to take Mylan to court in the Netherlands. Why Holland? Mylan is incorporated in the Netherlands, where taxes are lower, but it contends its "principal" offices are in the U.S. So Mylan says U.S. antitrust laws apply. And it argues that Teva's stake runs afoul of US laws that bar companies from buying stakes worth more than $76.3 million without earlier obtaining regulatory approval. Mylan, for its part, is trying to buy the over-the-counter drug maker, Perrigo, a move seen as a defensive measure to ward off Teva. Teva could pressure Mylan by boosting its stake soon so it could vote on Mylan's tender offer for Perrigo. Mylan shares, rising in early trading, adding to its 7 percent gain this year. Mylan, maker of the EpiPen, has another pain point. John Paulson's hedge fund has raised its stake in Mylan, and sources say it's encouraging Mylan's board to consider Teva's proposal.