Two institutions in Israel have small holdings in Mylan NV, and are likely to benefit from a sale of the company to Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA), a "Globes" probe has revealed. As of the end of 2014, Bank Hapoalim (TASE: POLI) owned 50,000 Mylan NV shares with a current market value of $3.6 million, and Sphera Funds Managemen had 97,000 shares with a current value of $6.9 million.
Bank Hapoalim held Mylan shares even earlier, but this was a new investment for Sphera in late 2014. The Mylan share was traded at $55 at that time, compared with its current $71 price and Teva's $82 per share bid. Figures for institutional holdings in the first quarter of 2015 have not yet been sent to the US Securities and Exchange Commission (SEC).
While Teva is seeking to acquire Mylan for over $40 billion, Mylan is declining the offer, and wants to acquire Perrigo Company (NYSE:PRGO; TASE:PRGO) for $34 billion, an offer than Perrigo is also refusing. Cowen and Co. analyst Ken Cacciatore wrote yesterday in response to Mylan's financial reports that the reports only reinforce his opinion that Mylan should be sold now.
According to Cacciatore, Mylan's cash flow, balance sheet, geographical deployment, and original drugs business, resting on a single drug (EpiPen) are inadequate. He wrote that Mylan should accept this offer, which is fair and creates value for Teva, adding that the two companies simply need each other. He noted that he found Mylan's arguments in support of the Perrigo acquisition unconvincing.
Citigroup Liav Abraham also does not find the financial rationale for acquiring Perrigo persuasive. She believes, also on the basis of talks with Mylan shareholders, that a Teva-Mylan deal is preferable. Merrill Lynch analyst Sumant Kulkarni, on the other hand, writes that he likes Mylan's strategy and daring in the generics field, and believes that it will continue to generate value for its shareholders.
It was reported yesterday that investors who apparently believe that Teva will acquire Mylan are increasing their holdings in the latter. John Paulson's hedge fund spent $520 million on Mylan shares, increasing its stake to 4.5%, and investment company Wellington rose to a 6.5% holding in Mylan after spending $917 million. If the deal goes through, these two companies will reap a handsome quick profit.
Published by Globes [online], Israel business news - www.globes-online.com - on May 7, 2015
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