John Paulson could go Dutch in drug takeover battle

There’s a $40 billion drug deal brewing — and billionaire investor John Paulson just might find himself in the middle of it, the Post has learned.

If Teva, the giant Israeli generic drug maker, can’t sway rival Mylan to accept a sweetened $40 billion takeover offer, it may turn to a successful Paulson play book for help, sources said.

Teva is offering a 50/50 combination of cash and stock for Mylan in a bid to create the world’s biggest generic drug maker. Mylan has rejected the offer and instead wants to buy Italy’s Perrigo for $34 billion.

Teva will sweeten its offer before July when Mylan’s shareholders will vote on the Perrigo deal, sources said. The new bid could include more cash, a “collar” to protect against a decline in share price and a guarantee to push ahead with the deal regardless of any conditions imposed by regulators.

Mylan Chairman Robert Coury, who built the company, has no interest in a deal with Teva at any price, judging by the “no way, no how” rejection letter he fired off last month.

Nevertheless, Teva believes it has an edge because of Paulson, sources said. Paulson & Co. has emerged as a top shareholder in Mylan, a sign the hedge fund manager will push the company to consider a takeover bid from Teva.

In his rejection letter to Teva, Coury relied on Dutch laws that require Mylan to consider “all stakeholders” — including employees and not just shareholders. Mylan is new to the Netherlands and only moved there this year to escape higher corporate taxes in the US.

Mylan also formed an unusual Dutch legal structure, called a Stichting, that has veto power to stop a takeover.

“Coury couldn’t do the Perrigo deal without Dutch law,” said a source close to the situation.

But this isn’t the first trip to the Netherlands for Paulson, who previously used the Dutch courts to successfully challenge a company’s defense.

In 2007, Paulson and fellow hedge fund Centaurus Capital sued Dutch industrial conglomerate Stork after it fought their plan to sell off parts of the company.

An Amsterdam court launched an investigation into the battle at the hedge funds’ request. The court dinged Stork for not going to mediation, costing shareholders time and money. In the end, Stork capitulated and agreed to sell itself to private-equity firm Candover.

If Mylan refuses to talk, Teva is considering following a similar litigation strategy in the Dutch courts — hopefully, with Paulson as its guide, sources said.

“There is a strong possibility they could bring claims in the US and the Netherlands in three to five months,” said the source. “They believe there is a lot of precedence in the Dutch courts,” largely because of the Paulson case.

A Paulson spokeswoman and Teva declined to comment.