Generic drugs group Mylan boosted its cash-and-stock offer to buy Irish company Perrigo to $34.10 billion, but the bid was swiftly rejected.
Mylan's pursuit of Perrigo, a major producer of over-the-counter drugs which acquired Ireland's Elan in a $8.6 billion deal in 2013, is widely seen as an attempt to fend off a $40 billion offer from Teva Pharmaceutical, the world's biggest maker of generic drugs.
Mylan’s latest offer comprised $75 in cash and 2.3 of its shares for each Perrigo share, up from its previous offer of $60 in cash and 2.2 of its shares.
Perrigo’s rejection further intensifies a three-way battle to gain a bigger share of the generic drugs market as more leading drugs lose patent protection.
With Mylan raising its bid for Perrigo, it would appear more likely Teva will step up the size/cash component of its rejected bid for Mylan, Leerink analyst Jason Gerberry said.
Based on Mylan’s Tuesday close, the raised offer values Perrigo at $242 per share. The previous offer was about $220 per share.
Perrigo said it viewed Mylan’s latest offer to be worth $202.20 based on Mylan’s March 10 share price of $55.31, before speculation over Teva’s interest in Mylan pushed up the stock.
“Today’s announcement from Mylan continues to propose a price lower than the previously rejected proposal,” Perrigo said.
Perrigo’s shares were up 1.3 per cent at $188.76 on the New York Stock Exchange Wednesday morning, while Mylan’s shares were up about 1.1 per cent at $73.52. Teva was up 1.4 per cent at $23.81.
Mylan rejected Teva’s offer on Monday, saying it grossly undervalued the company, adding it did not want to be paid with Teva’s “high-risk” stock.
On the same day, Israel-based Teva said it would move forward with its $82 per share cash-and-stock offer for Mylan.
Teva said in an email on Wednesday that it remains fully committed to its offer for Mylan, saying the deal is “more attractive” for Mylan stockholders than any alternative.
Mylan, which is legally based in the Netherlands, had said last week it would take its offer for Perrigo directly to shareholders after being rejected. – Reuters
