Mylan shareholders will on Tuesday decide on the generic drug maker's bid to acquire Dublin-based rival Perrigo.
Mylan is trying to acquire Perrigo in a $36 billion (€32 billion) takeover deal opposed by Perrigo’s board of directors. The Irish-based pharmaceutical company has repeatedly rejected the offer, saying it can do better on its own.
Mylan will be seeking approval from its shareholders, so it can then submit an offer to purchase to Perrigo’s shareholders, and hope that more than 50 per cent of them accept.
However, influential proxy adviser Institutional Shareholder Services (ISS) has recommended Mylan shareholders vote no on the takeover, saying it may not succeed and would result in significant dilution.
In its report, ISS acknowledged the logic in combining Mylan, which manufactures a host of generic drugs, with Perrigo, which makes a variety of branded treatments. It said the deal appeared to be expensive for Mylan shareholders, who would get $800 million in cost savings as a reward.
ISS’s recommendation veered in the opposite direction from two other proxy advisory firms which advised Mylan shareholders to vote for the deal.
"Ultimately, we do not believe that Perrigo shareholders will tender into this transaction – whether at 80 per cent or 50 per cent – and ISS's recommendation only further reinforces our view that Mylan's approach demonstrates an act of desperation as there is no rational path to a full acquisition of Perrigo," Perrigo chief executive Joseph Papa said.
