Almost seven years after the sale of Omega Pharma, the arbitration court Cepani has decided that Marc Coucke and the Waterland fund must pay 266 million euros to the buyer, the American pharmaceutical giant Perrigo.
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Business newspaper The time reported the news and it has meanwhile been confirmed to The standard. The initial claim for damages from the American pharmaceutical giant amounted to 1.9 billion euros. According to the Americans, Coucke & Co represented reality more beautifully than it was when it came to selling: the information was not accurate and incomplete, the sellers allegedly concealed things. Perrigo points out, among other things, the practice of booking delivered products that could still be returned as turnover. Furthermore, Omega Pharma would have presented recurring costs as exceptional. According to Perrigo, costs were also incorrectly capitalized on the balance sheet, also to embellish the profit.
With a repayment of 266 million instead of the required 1.9 billion euros, Coucke and the Waterland fund appear to be doing well. In addition, when Omega Pharma was sold, 10 percent of the purchase price, 250 million euros, was deposited in a blocked account as collateral for possible ordinary disputes.
The decision of the panel of arbitrators is a voluminous document to which strict confidentiality rules apply. The judgment in its entirety will not be published unless the parties agree otherwise. The fact that the refund exceeds the 10 percent commission may indicate that, according to the arbitrators in Brussels, there has been deliberate deception.
How did the takeover come together?
On November 6, 2014, Marc Coucke and the financial fund Waterland reached a provisional agreement on the sale of Omega Pharma to the American pharmaceutical group Perrigo for a substantial amount of 3.8 billion euros. It was 2.5 billion for the shares and Perrigo also took over the debt (1.3 billion). That was a remarkably high price.
Perrigo offered double for the shares compared to the other bidder, Sanofi. In retrospect, the French pharmaceutical company was not sorry that it had missed the deal. There were even congratulations for the winners. “Congratulations: you have already offered for the shares alone what we were willing to pay for the whole, including the debts,” Sanofi informed the new owner.
Two years after the first signature, on December 16, 2016, Perrigo started arbitration proceedings against the sellers: Coucke’s holding Alychlo and the financial fund Waterland. Today the verdict fell in that procedure.
brave face
Perrigo claimed deception and demanded 1.9 billion euros in damages. The company paid a crazy price for Omega Pharma and is in trouble itself because it has angry shareholders on its roof. They are demanding compensation from Perrigo because the company rejected a high offer from competitor Mylan.
Mylan offered a price in cash alone in 2015 that is almost double the price of Perrigo today. But on top of that, Mylan also offered its own shares. All together good for about $240, of which $75 in cash. And that while Perrigo recently listed only $ 40.
Perrigo insisted that the fall in its share price is the fault of Omega Pharma’s deception. Given all the proceedings, Perrigo has an interest in putting on a brave face after reading the arbitration ruling.
In principle, there is no appeal against the merits of the case. However, arbitration decisions often lead to new proceedings before an ordinary court. These do not concern the substance of the case, but, for example, the right of defense that has allegedly been violated. The arbitrators proceeded with caution in the Omega Pharma case.
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