Daily Management Review

Drugmaker Mylan's $26 billion Hostile Bid Snubbed by Perrigo Shareholders


11/14/2015




Drugmaker Mylan's $26 billion Hostile Bid Snubbed by Perrigo Shareholders
Mylan NV's $26 billion hostile bid was rejected by Perrigo Co Plc's shareholders that ended the Netherlands-based generic drug maker's seven-month pursuit of its smaller rival.
 
This incident ensured a victory for Perrigo Chief Executive Joseph Papa as Mylan's offer expired on Friday with just 40 percent of Perrigo shares tendered which was below the required minimum 50 percent.
 
Mylan shares rose as much as 14.4 percent, while Perrigo shares fell as much as 10 percent.
 
Following the development Jefferies analyst David Steinberg wrote in a note said that Perrigo can re-enter the M&A arena with much less uncertainty, increasing the odds of a mid-sized to large deal.
 
There were reports in the media that Endo International Plc, another Ireland-based drugmaker, was the ano tehr company that the Dublin-based company had held talks with.
 
According to Thomson Reuters data, by the end of October, as companies consolidate to cut costs and gain scale, healthcare deals worth a record $477 billion had been announced.
 
Perrigo has long been seen as a takeover target. The company has a large portfolio of consumer products, infant formulas and over-the-counter generic topical drugs.
 
Perrigo had announced job cuts and a $2 billion share buyback plan last month, in order to convince investors to rebuff Mylan's offer. It would immediately start buying back shares, helping pull its stock off a more than one-year low, Perrigo said on Friday.
 
Mylan was ready to move on, said the company Executive Chairman Robert Coury, who snubbed an offer from Teva Pharmaceutical Industries Ltd to pursue Perrigo.
 
Coury said in a statement that Mylan is well-positioned to "quickly execute on the next strategic, value-enhancing opportunities," some of which it has already identified.
 
Raymond James analyst Elliot Wilbur, however, said he did not expect an immediate deal.
 
"Mylan won't necessarily be immediately opening up its checkbook for the next company it can buy and instead will step back, take a breather, and focus on the companies or assets it should buy," he wrote in a note.
 
While Perrigo shares were down 7 percent at $145.50, Mylan shares were up 13.4 percent at $48.98 in afternoon trading.
 
Offering $75 plus 2.3 of its shares for each Perrigo share held, Mylan first made its interest in Perrigo public in April and went hostile in September.
 
Based on Mylan's Thursday close, the offer worked out to about $174.36 per share for Perrigo.
 
(Source:www.reuters.com) 






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