Mylan Moves to Cancel `Stichting` Takeover Defense

Mylan NV said Monday that it has moved to cancel an obscure but powerful legal vehicle called a "stichting" that the drug company adopted earlier this year when it was fending off takeover attempts from Teva Pharmaceutical Industries Ltd.

Stichting is a centuries-old Dutch legal structure that has become a popular self-defense tool for companies and wealthy individuals. In April, a Dutch law firm submitted paperwork on Mylan's behalf to the Netherlands trade registry to create a stichting.

The entity, named Stichting Preferred Shares Mylan, is essentially an empty shell. But it possesses special powers, thanks to a shareholder-approved provision tucked into the paperwork for a previous Mylan acquisition: If Mylan ever receives an unsolicited takeover bid, the stichting can get veto rights over any takeover.

Mylan said Monday that it has moved to cancel the preferred shares issued to the entity in July, as the threats to the company "have been sufficiently addressed."

Cancellation of the shares must be approved by Mylan shareholders.

Teva dropped its pursuit of Mylan in late July when it agreed to buy Allergan PLC's generics unit for $40.5 billion in cash and stock.

Meanwhile, Mylan continues its hostile pursuit of Perrigo Co., taking its bid directly to the company's shareholders last week.

Write to Chelsey Dulaney at [e-mail]

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September 21, 2015 08:45 ET (12:45 GMT)

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