Posted on June 4, 2015 by Janet Tavakoli
Why would a U.S. headquartered company use a Netherlands shell?
The Netherlands is a structured finance dream especially for tax structures and work-around of messy sanctions and regulations. There is yet another reason why the Netherlands’ flexibility is so beloved.
We’re in a low interest rate environment feeding a takeover frenzy. What if you’d rather not see your company acquired by a predator?
Mylan, a pharmaceutical company based in Canonsburg, Pa., used an empty shell, Stichting Preferred Shares Mylan, a foundation with a board but no legal owners. Apparently Mylan’s shareholders approved a provision for the set-up that gave the stichting veto power over unsolicited takeover bids via a transfer of special shares. Shareholders may or may not have been fully aware of what they approved, since it was buried in documents for a different deal–the takeover of Abbott–but they approved nonetheless.
Decisions: Life and Death on Wall StreetWhen Teva Pharmaceuticals made an unsolicited bid, the stichting vetoed it. The board consists of Dutch lawyers, not Mylan’s managers, so if a deal is sweet enough, it might go through anyway. That would mean a better deal for shareholders.
Some pundits immediately opined that the very use of a stichting is somehow shady. That’s similar to saying incorporating is shady because dirty deals have been done under that guise. There are indeed shady uses of stichtings, but that’s not always true.
On the surface, Mylan appears to be using a smart defense to thwart aggressors or at least to buy time.
Max and Stacy
I look forward to talking to Max and Stacy later this summer, and we’ll have some surprises for The Keiser Report. You might wish to read Decisions: Life and Death on Wall Street for some light background; you can borrow it for free on Amazon if you are a member of Kindle Unlimited or Amazon Prime. Ditto Unveiled Threat and my fiction book in English or Spanish.
Speaking of foreign languages, someone asked me to translate what I mean by a Kindle Single. It was named after record singles. Short general-interest narratives are curated by editors at Amazon exclusively for the publishing brand headed by journalist and editor David Blum. They receive thousands of submissions per month and only take a handful. Here’s the long answer if you are interested: “Amazon Kindle Singles: Delicious Snackable Stories.”