NEW YORK (HedgeWorld.com)–Richard C. Perry, a hedge fund manager whose funds control 9.89% of the voting shares of Mylan Laboratories Inc., Canonsburg, Penn., said in a filing with the Securities and Exchange Commission that he plans to sell his entire stake on the open market.
Perry and his management company, Perry Corp., said that they are acting in response to Mylan’s recent decision to abandon its plans to acquire King Pharmaceuticals Inc., Bristol, Tenn.
They plan to “effect all sale transactions on the open market at the closing price of the Company’s stock as
reported on the New York Stock Exchange on the date of the transaction,” the filing said. “To the
extent practicable, shares will be sold daily until the entire position is sold.”
They also plan to close out the security-based swap agreements in place with respect to the shares as the shares themselves are sold until all such shares are sold. That was a controversial aspect of the debate and litigation in recent months over control of Mylan and the fate of its plans for King. Carl Icahn, who also controls a large stake in Mylan and who opposed the acquisition, complained that Mr. Perry had purchased “tainted” voting rights in hopes of pushing that transaction through. He saw these rights as tainted because, he said, they were uncoupled from economic risk.
Neither Mylan nor King immediately returned calls for comment Tuesday.
It was in July 2004 that the two companies announced that the former would acquire the latter in a stock-for-stock deal. King has a sales force experienced in the marketing of cardiovascular products. Mylan has plans for a new drug in that market, nebivolol, for the treatment of hypertension (and it continues to await approval of the Food and Drug Administration–in late February 2005, the FDA said the review would take at least another three months).
Mr. Icahn soon began purchasing shares in Mylan through High River LP, Mt. Kisco, N.Y. He offered to buy Mylan and threatened to initiate a proxy fight to block this acquisition, contending that the synergies were exaggerated and, in particular, that King faced the impended expiration of, or legal challenges to, four crucial patents.
In December 2004, Mr. Icahn filed a lawsuit in U.S. District Dourt, Middle District, Pennsylvania (Harrisburg), over Mylan’s alleged breach of its fiduciary duty to the shareholders, and over the voting rights of the so-called “tainted” stock owned by the Perry group. With the acquisition abandoned and the Perry group now selling its stock, will Mr. Icahn pursue that lawsuit? His lawyers could not be reached for comment Tuesday.
Contact Bob Keane with questions or comments at: firstname.lastname@example.org.