If today's media reports are accurate then Mylan's hostile takeover of Perrigo has failed. That's good news for Perrigo shareholders. But it's a double- whammy bad news day for Mylan's: Mylan eschewed a $40BN takeover by Teva earlier this year to focus on taking control of Perrigo. The result has been a sharp recent decline in Mylan's share price.

In the cold light of day, the decline in Mylan's share price may come to be recognised as being more to do with the manner in which it fought Teva than its failure to acquire to Perrigo.

In doing so Mylan adopted a version of the poison-pill defence. It used a related foundation to exercise a call option to purchase 50% of its total issued and outstanding capital. This obviously made it more difficult for Teva.

In similar M&A actions in the past similar strategies have been successful. But the real beneficiaries are usually the corporate executives and not the shareholders. It can make the shares less attractive to new investors pushing down the share price. The classic case in point is Yahoo. In 2000 its share price dropped fully 94% when it added a poison pill clause to its articles.

In short while the poison pill defence can deter predators it makes it more difficult for shareholders to profit from takeovers. Indeed as we can see the usual consequence for shareholders is a significant financial loss.

Leman Solicitors Banking and Securities Litigation Team advise corporates and institutional investors on their rights and obligations.

Generic drug maker Mylan $26bn hostile bid for peer Perrigo looked unlikely to succeed, a few hours before it was set to expire, a person familiar with the matter said.