By Liz Hoffman
Mylan NV sued Kirkland & Ellis LLP over the law firm's role
advising Teva Pharmaceutical Industries Ltd., which is in a bitter
takeover battle with the drug maker.
Mylan said in a complaint, filed in Pennsylvania state court
late Friday, that because Kirkland has represented the company in
the past, it should be barred from working for Teva, which last
month launched a $40 billion public bid that Mylan has
rejected.
"We are confident in the propriety of our representation of Teva
Pharmaceutical in this matter," Kirkland said in a statement. "We
have a written conflicts-waiver letter, signed by Mylan, regarding
the work we have done for Mylan. These filings are without merit,
and are simply tactical measures designed to impede the proposed
transaction."
According to the lawsuit, Mylan has had a relationship with
Kirkland since January 2013, and the law firm has had "wide-ranging
access to Mylan's business," including confidential information
about its drug pipeline, pricing strategy and prospects for
regulatory approval. The information allegedly includes details
about Mylan's EpiPen allergic-reaction treatment, which Teva is now
targeting with a competing product. Such information is typically
considered valuable for a company pressing a takeover bid, helping
it determine, for example, how much to offer and whether regulators
will sign off.
Kirkland, one of the top mergers-and-acquisitions law firms, has
handled many of Teva's biggest transactions, including its $6.8
billion takeover of Cephalon Inc. in 2011 and its acquisition of
NuPathe Inc. last year.
Mylan rejected Teva's $82-a-share offer in unusually harsh terms
on Monday, with Mylan Executive Chairman Robert Coury in a letter
to Teva Chief Executive Erez Vigodman calling Teva a "poorly
performing, troubled company." He also attacked Israel-based Teva's
corporate culture and the value of its stock.
Mr. Vigodman responded by saying the letter "paints a
fundamentally distorted picture of Teva."
Mylan, which is incorporated in the Netherlands, is
simultaneously pursuing a roughly $36 billion bid for Perrigo Co.
that has also been rejected.
Suing a former adviser in a takeover battle is a rare move.
Airgas Inc. in 2010 sued Cravath, Swaine & Moore LLP for
representing Air Products & Chemicals Inc., arguing that
Cravath's previous relationship with Airgas should have prevented
it from working on the potential deal. That case was eventually
settled on confidential terms after Air Products abandoned its
bid.
Cravath is now advising Mylan.
Write to Liz Hoffman at liz.hoffman@wsj.com
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