Brigadier General (res.) Gil Hirsch filed a suit against Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) in the Central District Court today for NIS 19 million for alleged non-payment of a NIS 19 million mediation fee in the acquisition of Cephalon Inc. in 2011.
Hirsch claims that his company Defensive Shield put Teva's then CEO Shlomo Yanai (himself a reserve general) in contact with Australian biotech company Mesoblast Ltd. (ASX: MSB). Cephalon was a shareholder in the Australian company, and Hirsch claims to have testimony from Mesoblast's CEO supporting the fact that one of the main reasons that Teva acquired Cephalon in 2011 for $6.8 billion was its holdings in Mesoblast.
After the deal was completed, Hirsch approached Teva and Mesoblast through Defensive Shield to receive a mediation fee but was rebuffed by both companies on the grounds that there was no direct agreement between Teva and Mesoblast.
Teva said in response, "The suit has been received today at the company's offices. After the company studies it, it will respond in the appropriate channels."
Former Teva CEO Yanai confirms that Hirsch did put Teva in contact with Mesoblast but insists that Defensive Shield is not entitled to any recompense because the deal was signed between Teva and Cephalon, which held 20% of Mesoblast.
Before the suit was filed, Defensive Shield tried to reach an out-of-court settlement with Teva but both companies rejected the offer out of hand. A letter sent to Defensive Shield's lawyers said, "Teva fully rejects all the allegations….. Teva never made a commitment to pay your client and they never provided Teva with services and no network of relations were arranged between Teva and them. Your clients was not directly or indirectly involved and did not contribute to the acquisition of Cephalon and the acquisition cannot be attributed to them."
Published by Globes [online], Israel business news - www.globes-online.com - on December 29, 2013
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