Billionaire Len Blavatnik is considering investing $ 3 billion in Teva Pharmaceutical Industries, The Marker has learned.
Blavatnik may acquire a significant share of Teva if the company is trading below its economic value despite the heavy financial debt that oppresses the drugmaker.
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The investment may be made in a private placement of shares, which will help Teva deal with a net financial debt of $34.7 billion at the end of the third quarter of 2017.
Blavatnik may also try to buy a package of shares from Allergan, which holds 9.9% of Teva, worth $1.14 billion.
According to the agreement with Teva, Allergan was prevented from selling the Teva shares it received until the beginning of August 2017.
A week ago, Allergan announced that it intends to sell Teva shares in the coming weeks after it made a cumulative $3.3 billion provision for the decline in the value of its holdings in Teva.
Teva, traded at a value of $11.6 billion, reduced its sales forecast, earnings per share and cash flow in 2017 following the release of its financial results.
The expected $1.3 billion drop in cash flow compared to the previous forecast published in August 2017 is due, among other things, to early and difficult generic competition from Teva’s earlier estimate of its most profitable drug, Copaxone, for the treatment of multiple sclerosis.
The drop in cash flow will make it difficult for Teva to meet debt payments to bondholders and banks, which amounts to a cumulative sum of $17.5 billion in 2018-2021.
Blavatnik, 60, is ranked 40th in the world’s Top 10 rankings by 2017, and its capital is estimated at $ 20 billion.
He and a friend from university, Viktor Vekselberg, bought properties in the early 1990s as part of Russia’s privatization process. Later they formed the Renova investment vehicle, and then the two joined with Mikhail Fridman‘s Alfa Group to form the AAR venture.
Access has since diversified its portfolio to include investments in industries such as oil, entertainment, coal, aluminum, petrochemicals and plastics, telecommunications, media, and real estate.
Blavatnik’s interests in Israel include control of Clal Industries, which he gradually acquired from the IDB group and the public, for a total consideration of NIS 2.3 billion. The most prominent holding of Clal Industries is the cement monopoly Nesher.
He also holds 20% of the shares of RGE, controlled by Aviv Giladi, which holds 24% of the shares of Reshet and 51% of Channel 10.