Len Blavatnik mulls stake in Teva
Leonard (Len) Blavatnik is considering a substantial investment in Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA). Talks are at the initial stage, with Blavatnik examining the possibility of taking a significant stake in Teva, which would help the company meet its commitments.
Blavatnik, whose Israeli interests include control of Clal Industries, indirect control of Channel 10 television, and a stake in Reshet (now operating Channel 13), is invested through Clal Industries in Clal Biotechnology, in which Teva also holds shares and in which it recently increased its stake. In March of this year, Teva bought an additional 4% of Clal Biotechnology at a premium of 20%, for NIS 20 million, bringing its total stake to 18%.
Teva’s current market cap is $11.5 billion. Its share price sank to a low not seen since 2017, after the company once more cut its guidance in its quarterly financials released last week, which is also when its new CEO, Kare Schultz, took charge. Allergan Plc, which holds 10% of Teva, recently declared that it would gradually sell its holding, which will exert further negative pressure on the share price. One of the possibilities being examined is of Blavatnik buying this stake directly from Allergan.
At the end of last week, Standard & Poor’s cut its rating outlook for Teva to negative, meaning that a rating downgrade could be imminent. At present, the rating is one level above junk-bond status, at BBB-.
“Our negative outlook reflects our view that there is additional uncertainty around Teva’s business position, as reflected in its declining ability to control and predict its financial results and generate cash flow to repay debt given heightened competition in key franchises,” Standard & Poor’s announcement said.