Mylan has failed to amass a 50% stake in hostile takeover target Perrigo, ending any chance of a merger of the two companies in the near-term.
By the deadline on Friday, Mylan owned around 40% of Ireland-based Perrigo’s outstanding ordinary shares and so was unable to force through the $26bn takeover bid.
Under Irish corporate law, Mylan will not be able to make another bid for over-the-counter (OTC) and generic drug specialist Perrigo for at least 12 months.
Netherlands-headquartered Mylan first made a play for Perrigo in April, but three separate offers were rebuffed in quick succession, prompting the company to make a hostile bid that was approved by its shareholders – with a two-thirds majority – towards the end of the summer.
A Wall Street Journal report notes that the tender offer went to the wire but was eventually defeated with the help of a block of Israeli investors in Perrigo who own around 12% of the company’s stock and could not be persuaded to sell.
It is widely considered that Mylan’s interest in Perrigo was sparked in part because it was also trying to fend off unwanted overtures from Israel’s Teva. The latter proposed, and subsequently withdrew, a $40bn takeover deal but has been rumoured to be preparing a fresh bid for the Dutch company.
Meanwhile, Perrigo has also made some defensive acquisitions in a bid to maintain its independence, snapping up a portfolio of GlaxoSmithKline (GSK) consumer health brands in June including nicotine replacement therapies NiQuitin and Nicotinell.
In a statement issued after the defeat Mylan’s executive chairman Robert Coury said: “Mylan viewed Perrigo as a unique and exciting opportunity, but not one that was required for the future success of our company.”
Meanwhile, Perrigo chairman Joseph Papa said: “We have said all along that this offer from Mylan was a bad deal for our shareholders, as it significantly undervalued our durable business model and industry-leading future growth prospects.”
He added that Perrigo will go ahead with a $2bn share repurchase and said the firm plans to complete $500m of that by the end of 2015.
Shares in Mylan ended the day on Friday up 13%, while Perrigo fell around 6%.