Is Agis Peeved With Perrigo


    ISRAEL — The Israeli newspaper Ha’Aretz reported late last week that trouble may be brewing between Allegan drug maker Perrigo Co. and an Israeli pharmaceutical firm the company acquired last fall. According to the report, relations between Agis Industries’ former chairman Mori Arkin and Perrigo executives “have soured recently over strong differences of opinion regarding the way the companies presented themselves during merger talks.”

    Agis allegedly feels that Perrigo has been poorly managed, leading to a sizable drop in stock price. Ha’Aretz suggests that Perrigo will counter that assertion by pointing out that several of Agis’ products have failed to meet FDA approval and that the Israeli operation has shown poor financial management.

    Arkin may be upset simply because he has lost a great deal of money. The buyout deal reportedly gave him $200 million in cash, a position as vice chairman of the combined companies’ board and more than 10 percent ownership of its stock.

    That stock has fallen in value by over 25 percent since the sale. The Israeli report suggests Arkin has lost over 110 million Israeli new shekels ($24 million) on paper. That is a sizable loss for anyone, but it is worth noting that Arkin is seen as somewhat of a Donald Trump among Israeli investors. A November 2004 story in Ha’Aretz’s business journal, TheMarker, reported on Arkin’s uncanny knack for selling stocks and companies at their absolute peak, just before their values drop precipitously. Such may have been the case with Agis Industries, but Arkin was only able to take half the proceeds in cash, leaving the rest vulnerable to market forces.

    Regardless of the motivations, a “major legal brawl” is apparently in the offing. According to Ha’Aretz, a “delegation of Perrigo representatives, including company lawyers … arrived in Israel to handle the impending legal battle.”

    Arkin denied the Ha’Aretz report. Perrigo responded similarly.

    “We don’t respond to rumors,” said company spokesperson Ernest J. Schenk. “Mori Arkin has already denied (the Ha’Aretz report). I don’t really have anything further to add.”

    Schenk would not verify if legal proceedings were underway, or if the company had sent a delegation to Israel as reported.

    “We are committed to making this combination work,” he said. “The management team continues to work together, and we interact face-to-face in both Israel and Allegan.”    

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