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Teva circling as Perrigo rejects second Mylan offer

Claims latest offer is lower than a recent informal bid


Perrigo has rejected a second formal takeover offer from Mylan, saying that the latest deal on the table is actually lower than an earlier informal bid. 

Mylan made a non-binding proposal to Perrigo's board earlier this month to buy the company for $205 per share in a combination of cash and stock, which valued the company at a little under $29bn.

Under pressure from an unsolicited $40bn takeover attempt by Israeli rival Teva last week, Mylan has now upgraded the proposal to a formal offer of $60 in cash and 2.2 of its shares in return for each Perrigo share. It maintains that values the Irish company at $33bn.

However Perrigo - having already rejected the earlier bid out of hand as undervaluing its business - takes issue with Mylan's interpretation of the deal, which values the bid at $222 per share.  

It bases its own calculation on Mylan's share price back in early March - before speculation of Teva's offer started to circulate - and argues that makes the formal offer worth just over $181 per share.

"Shareholders are strongly advised to take no action in relation to the offer," said Perrigo's board in a statement issued on Friday.

Mylan's offer would result in its shareholders owning almost 62% of the combined company, with the balance held by Perrigo's investors, and would create a company with combined sales of $15bn and - according to Dutch company - the opportunity to reduce annual costs by around $800m. 

The new entity would have a balanced portfolio in generic drugs, over-the-counter medicines, nutritional products, infant formula and vitamins, it said.

Meanwhile, Teva's long-awaited bid for Mylan would create a $30bn-a-year powerhouse in generic and speciality medicines, although it is expected that it would have to divest some businesses to satisfy anti-trust requirements.

Mylan seems just as reluctant as Perrigo to complete a deal, although it has not issued a formal rejection. It said that the combination was not a good fit and was unlikely to be acceptable to regulators as it would create a dominant generics player, but added it would review the offer.

Buoyed by Perrigo's response to Mylan, Teva reiterated on Friday its determination to complete the merger.

Article by
Phil Taylor

27th April 2015

From: Sales



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