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Perrigo rejects Mylan again as Teva bites back

There is much debate over the value of the company’s shares


The ink had barely dried on Mylan's third offer for Perrigo yesterday when it was rejected, once again because of the valuation of its shares.

The new offer of $75 in cash and 2.3 Mylan shares for each share in Ireland-domiciled Perrigo values it at a hefty $35.6bn but Perrigo insists it is still lower than Mylan's opening bid of $205 per share earlier this month. A second offer was turned down late last week.

The sticking point is just how much a Mylan share is worth. Netherlands-based Mylan is basing its calculations on a value of $68.36, the closing price on the day before it launched its first bid, and says its offer is now worth $232.23, a premium of around 25% on Perrigo's closing share price on Tuesday. 

Perrigo insists however that the true value dates back to early March, when rumours of interest in its Dutch suitor by Teva started to gain ground and the former's share price was around $55. On that basis Mylan's offer is now set at around $202, it says.

Mylan chairman Robert Coury reiterated the firm's "hell or high water" commitment to securing antitrust approval for the takeover and noted financing is in place to take it to a speedy conclusion, creating "a powerhouse company that will be an engine for growing shareholder and stakeholder value."

Mylan is keen to bring Perrigo to the altar rather than succumb to the advances of Israel's Teva, which proposed an $82-per-share takeover last week valuing the Dutch company at more than $40bn.

Coury sent a stinging letter to Teva chief executive Erez Vigodman earlier this week that spelled out Mylan's opposition to that idea, questioned the credibility of the Israeli company and laid out minimum requirements for any takeover. 

Yesterday it was Vigodman's turn, who said shareholders in both companies "do not support, or benefit from, mudslinging, mischaracterisation, rehashing of history or selective presentation of facts."

Vigodman restates Teva's view that its offer is a significant premium to Mylan's pre-speculation share price - unsurprisingly backing Perrigo in putting that at around $55 - and suggests Mylan's latest offer for Perrigo cedes substantial ownership of the company at a discount to the minimum requirements detailed by Coury.

He also insists that Mylan's concerns about antitrust issues - given the two companies' large share of the generic drugs market - are overstated and any divestments required by regulators would be "manageable." 

Article by
Phil Taylor

30th April 2015

From: Sales



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