Teva blackballs TRC's mini-tender [pg. 15]

Teva Pharmaceutical Industries Ltd. urged shareholders to reject the mini-tender offer made at the end of last week by TRC Capital and analysts tended to agree with the drug company's assessment. "Any takeover approaches, which are not likely in the short-term, would have to be at much higher offer prices", said Yisca Erez, an analyst at Clal Finance Batucha. Under the terms of the offer, TRC Capital would buy 2.5 million of Teva's ordinary shares, or about 0.4 percent of the company, in the form of American Depository Shares, at a price of $37.80 per share, which is 3.8% below the $39.31 Nasdaq closing price of the ADS on April 19, the day prior to the date of the offer. "I don't think someone will accept this low offer and sell," Erez said, noting that Teva was still trading at an attractive share price and investment houses might be looking into acquiring minority stakes of 4% to 5%. "Teva's shares are trading at a low level. This might change and shares will go up if the company's report on 2006 guidance scheduled for May 10 is good." TRC Capital's offer will expire on May 19. A mini-tender is an offer to buy securities from a company's shareholders at a discount to the price at which the shares are currently trading. The Securities and Exchange Commission has issued an investor alert regarding these mini-tender offers, noting that in making the offers at below-market prices bidders are "hoping that they will catch investors off guard if the investors do not compare the offer price to the current market price." Toronto-based TRC Capital has made numerous such mini-tender offers. The company has previously approached Schering-Plough Corporation, Abbott Laboratories and, most recently, Anheuser-Busch and Chevron Corporation. These offers are devised to seek less than 5% of a company's outstanding shares, thereby avoiding many procedural and disclosure requirements of the SEC because they are below the agency's threshold for providing such disclosure and procedural protections for investors.