Publications
Publications
- May 2014 (Revised June 2016)
- HBS Case Collection
Mylan Lab's Proposed Merger with King Pharmaceuticals—courseware
By: Lucy White
Abstract
Perry Capital owns shares in King and, to facilitate approval of the merger, buys shares in Mylan, whilst hedging out its economic exposure to Mylan's share price using derivatives. The price at which Mylan proposes to merge with King is generous to King shareholders, but the merger does not look likely to be approved by Mylan shareholders, who must vote upon it. If Perry can swing the voting in favor of the deal, it will gain handsomely on its King shares without facing any corresponding losses on its Mylan holdings since those are hedged. Carl Icahn, another shareholder in Mylan, opposed the deal and sued Perry for alleged vote buying.
Keywords
Mergers and Acquisitions; Voting; Ethics; Stock Shares; Investment; Lawsuits and Litigation; Ownership Stake
Citation
White, Lucy. "Mylan Lab's Proposed Merger with King Pharmaceuticals—courseware." Harvard Business School Spreadsheet Supplement 214-709, May 2014. (Revised June 2016.)