Perrigo, the over-the-counter drug specialist, is bringing more of its business to Dublin as it looks to fend off the unwanted attention of generic drug giant Mylan. The company relocated its headquarters to Ireland when it acquired the rump of Elan in a $8.6 billion deal in 2013.
In a statement, the firm said it is taking “immediate steps to consolidate its operations, supply chain and procurement management activities into one global centre of excellence in Ireland.
Chief executive and president Joe Pappa said: “These actions will also result in significant expansion of our global headquarters in Dublin and our overall Irish footprint, delivering on our stated goal of utilising our Irish headquarters as a platform for global growth.”
Perrigo said it expects annualised operational and tax benefits of $105 million from these initiatives.
The move comes as it announced plans to cut 800 jobs, or 6 per cent of its worldwide staff, in an effort to save $175 million a year.
The company said its proposals, which also involve a $2 billion share buyback, will deliver far superior shareholder value than Mylan’s takeover offer.
Hostile takeover attempt
Mylan, which first made a bid for Perrigo in April, went hostile in September, offering $75 in cash and 2.3 of its shares for each Perrigo share held. This translates into $169.05 per share as of Mylan’s Wednesday close.
Under Irish laws, Mylan has to secure at least 80 per cent of Perrigo shares for the deal to go through. Perrigo shareholders have until November 13th to accept Mylan’s offer.
Perrigo Chief Executive Joseph Papa said the company was not against deals and was willing to consider opportunities. “We just happen to think the deal in front of us today is a bad deal,” Papa said. “If someone came in with a cash offer or an appropriate premium to our standalone price, we’d certainly be open to that.”
Perrigo’s board, which is restricted by Irish laws from blocking the deal, has repeatedly urged shareholders not to accept Netherlands-based Mylan’s offer.
Perrigo’s actions yesterday found favor with Guggenheim analysts, who said they believed the drugmaker’s shareholders were better off owning its stock rather than Mylan’s stock.
