U.S. Investment Bank Tried to Sell Teva Division Without Company's Knowledge

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Teva CEO Jeremy Levin probably opened his conversation on Sunday night with a U.S.-based official from Jefferies, an investment banking firm, something like this: "So tell me, is it possible that you are trying to sell our oncology division without asking us?"

The question would have been posed to Kevin Sheridan, who is in charge of pharmaceutical investment banking at Jefferies. He told TheMarker on Monday that he regretted any embarrassment caused to Teva, and acknowledged that his firm had no authority to sell off pieces of Teva and was not even its investment bank. And due to this incident, he added wryly, Jefferies probably won't be Teva's banker in the future either.

The situation unraveled when the Teva CEO discovered that Jefferies, which is traded on the New York Stock Exchange at a market cap of $4.4 billion, had recently distributed material about the oncology division of the Israeli pharmaceutical giant to potential investors. In his conversation with Sheridan, Levin insisted, however, that the division was not up for sale.

Sheridan's effort was spurred by rumors at a pharmaceutical convention in San Francisco in January that Teva was planning on divesting of some of its divisions, including its cancer drug division, to concentrate on its more core businesses. Jefferies took the initiative of preparing material about the oncology division for potential investors in the apparent hope that the potential buyers would use the investment bank as an intermediary for any such deal.

In retrospect, Sheridan admitted, the approach wasn't such a great idea. He also admitted that he had contacted Teva about the rumor of a division sell-off and was told in no uncertain terms that the Israeli company had no intention of divesting of its line of oncology drugs. Sheridan said he himself realized at that point that there was no point in looking for potential buyers but says word never got to people under him who continued to look for investors.

Teva CEO Jeremy Levin in Tel Aviv in 2012.Credit: Reuters

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