Mylan N.V. (Nasdaq: MYL; TASE: MYL) was first listed on the TASE two months ago, in addition to its listing on Nasdaq, and the share was added to the Tel Aviv 25 Index three weeks ago. Mylan had itself dual-listed as part of its attempt at a hostile takeover of Perrigo Company (NYSE:PRGO; TASE:PRGO), which has been dual-listed for a decade since it acquired Israeli company Agis Industries.
Mylan promised the Israel Securities Authority that it would remain listed on the TASE for a year if its acquisition of Perrigo did not go through, and three years if the acquisition was completed. Mylan chairman Robert Coury, who visited Israel on the occasion of his company's listing on the TASE, promised, "With or without Perrigo, we'll stay on the TASE." Nevertheless, after Mylan failed in its takeover bid, the Israeli capital market believes that Mylan will be delisted from the TASE after a year.
These expectations, however, may be confounded. When Jerusalem Brokerage pharma analyst Jonathan Kreizman asked Mylan about its intentions in the matter, he received a quick answer: "As part of our listing process on the TASE we committed to remain listed for one year. That said, however, we have no intentions of delisting after the one year period, as we see significant benefits for the demand for our shares on the TASE."
Kreizman, who is slated to begin covering the Mylan share , said today, "If the company really remains here for the medium and long term, it will be a positive event, because it will inaugurate a process in which the investment entities become more familiar with and informed about the company, just as happened with Perrigo."
Kreizman believes that the main benefit for Mylan from its TASE listing is the required holdings in the share by investment institutions as benchmark players. "In other words, the company's presence over time in some of the main indices will increase the holdings by institutions considered stable shareholders, in comparison with US funds, which are not required to keep the share," Kreizman said.
He added that the Israeli investment institutions' aggregate holdings in Perrigo shares amounted to 12-13% of the company's capital. "We saw how they stood up for Perrigo on the decision about the merger with Mylan," he said. "Out of the wave of companies recently listed on the TASE, the possible retention of Mylan in the long term will be considered an achievement for the TASE leaders, as opposed to the listing of companies like MannKind Corporation (Nasdaq: MNKD; TASE: MNKD), which in retrospect looks like a case of opportunism, given the share's 60% plummet since it was listed on the TASE."
Mylan's market cap is $27.2 billion. It currently accounts for 4% of the Tel Aviv 25, although its value would entitle it to a 10% share. The 4% proportion was set by a revised decision by the TASE, because the company has no affinity to Israel.
The TASE revised the criteria for entry to the indices following the trend of bringing high-risk US biomed companies to Israel. These companies had themselves listed on the TASE and took advantage of the demand created by their entry to the indices to raise sizeable amounts of money from local exchange traded funds.
Mylan, primarily a generic company, yesterday announced the launching of a generic version of Pfizer's Zyvox for treatment of infections, annual sales of which total $458 million. The Mylan share is traded at $55.30, about the same as in last March, before rumors that Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) planned to acquire the company began circulating. The Mylan share price reached over $70 during the year, following Teva's takeover bid, and fell to $40 after Teva abandoned the idea.
The Mylan share price has climbed 28% since Mylan's takeover bid for Perrigo failed. According to the analysts covering the share, there is good reason for the positive trend to continue. According to figures from Thomson/First Call, the average target price for the share is $63.60, a 15% premium on the market price. 12 analysts recommend "Buy" for the Mylan share, and seven recommend "Hold."
Published by Globes [online], Israel business news - www.globes-online.com - on December 30, 2015
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