Mylan says foundation acquires 50 percent of its shares in maneuver intended to block Teva bid

Drugmaker Mylan on Thursday used a provision of Dutch law to put up a barrier that makes it harder for larger rival Teva Pharmaceutical Industries to buy the company.

Dutch companies like Mylan can create a foundation, or stichting, that has the option to buy stock in order to protect the interests of the company. Mylan took that step in April, and on Thursday the foundation took a 50-percent stake in Mylan by buying 488.4 million preferred shares of its stock.

Both Mylan and Israel-based Teva are looking to consolidate in an increasingly competitive generic drug industry. Teva wants to get even bigger and combine its manufacturing and sales operations with Mylan's to save money. Mylan wants to combine its generic drugs with Perrigo Co.'s over-the-counter medicines, generic drugs, nutritional products and infant formulas.

Teva has offered to buy Mylan for $40.1 billion, or $82 per share. Mylan says that's too low, and its wants to go ahead with a previous offer to buy Perrigo, an Irish company that makes over-the-counter medicines and other products. Mylan's valued its latest offer for Perrigo at $34.1 billion, or $232.23 per share in cash and stock, buy Perrigo disputed its value of the bid and rejected it.

In a press release, the foundation said Thursday that a takeover by Teva would put the interests of Mylan and its stakeholders at risk, and said it opposes a sale to Teva but won't take a position on the Perrigo deal.

Teva, which had taken a 4.6-percent stake in Mylan, said it disagreed with the foundation and added the move could deprive shareholders of the value they could gain from a combination of Teva and Mylan.

RBC Capital Markets analyst Randall Stanicky said the move was expected, and that Teva seems to be familiar with Dutch law and the steps it can take to fight Mylan's move. He thinks that Mylan shareholders won't approve the purchase of Perrigo, and that it's more likely that Teva will buy Mylan.

Shares of Mylan NV fell $1.01 to $66.89 in afternoon trading and shares of Teva Pharmaceutical Industries Ltd. fell 7 cents to $62.44. Perrigo Co. shares fell 71 cents to $188.34.