Teva is rumoured to be preparing a higher, formal bid for Mylan as it tries to win shareholders in the company over to its cause.
The Israeli pharma company has already made informal approaches to Mylan – which have all been robustly rejected by Mylan’s board – but according to a Bloomberg report is planning to table a firm offer of $86-$88 per share this week.
A bid at that scale would value Netherlands-domiciled Mylan at around $43bn, a sizeable increase on the last informal offer of a little over $40bn.
The chances of Teva placing a formal offer on the table have been increasing in recent weeks as the company has steadily amassed a 4.61% stake in Mylan, which under Dutch laws gives it the right to start a takeover bid for the company.
Under chairman Robert Coury, Mylan has rebuffed all of Teva’s attempts to get around the negotiating table whilst pursuing its own acquisition of an equally reluctant Perrigo, based in Ireland, in what is seen as a defensive move.
Perrigo meanwhile is in the midst of its own buying spree having bought Belgium’s Omega Pharma last November and Elan in 2013 and has just been linked to a possible bid for Boehringer Ingelheim’s generics unit Roxane Laboratories. There have been some signals of late however that Perrigo could be swayed by a raised offer from Mylan.
Teva may be able to win some Mylan shareholders to its banner with a bid but still faces some significant hurdles, not least that Abbott – which has a 14.2% stake in Mylan – favours a marriage to Perrigo.
Meanwhile, Mylan has implemented a poison pill strategy that could see it form an independent foundation with the right to buy a majority block of preferred shares – with voting rights – in the event of a hostile takeover bid.
Adding Teva and Mylan together would create near-$30bn-a-year powerhouse in generic and speciality medicines that would break into the top 10 pharmaceutical companies. It is expected however that Teva would have to divest some businesses to satisfy anti-trust requirements.